MFAA dismisses pre-GFC fraud claims

by BN22 Aug 2012

The MFAA has come out in defence of the mortgage broking industry's integrity prior to the GFC, arguing incidences of low-doc fraud during the period were 'miniscule'.

In response to an Australian Broker online poll which found that 85% of 208 respondents thought banks had encouraged fraud during credit boom times, the MFAA issued a response to the market.

"The survey does not reflect in any way brokers’ interaction with their lenders over the last 10 years," MFAA CEO Phil Naylor said.

"From our own experience...the incidence of fraudulent applications being written for low-doc loans is miniscule, while there is very little evidence that the vast majority of lenders encouraged this illegal activity," he said.