Dawie Verryne, General Manager of Korbitec's Property Division, who co-hosted the event with GlenRand MIB, comments that banks and attorneys alike have experienced a drastic increase in fraudulent home loan applications in the last year. "Fraudsters are becoming more organised and sophisticated and often include syndicates. This is in line with trends that have been observed in the UK", adds Verryne.
In the seminar, expert speakers from the South African Law Society, Absa, Nedbank, and Sabric, addressed 120 delegates, representing senior managers from all four of the big South African banks and directors and partners of leading law firms in the industry.
Vincent Faris, well-respected auditor and consultant of the Law Society of South Africa, argues that lack of proper supervision and management are the most significant contributors to conveyancing fraud. "Fraud in conveyancing matters has risen tenfold in the last 6 years" says Faris, pointing to 30 fraudulent matters in 2003 vs. over 290 matters in 2008.
According to Northern Provinces auditor for the Law Society, Leo Swart, the lack of proper practice management tools and systems causes major problems for attorney trust accounts. Swart warned attorneys that touting falls well within the definition of the Corruption Act of 2004. "It is important that the industry gets this under control. The Law Society of South Africa, law firms, banks and other accountable institutions and persons, have a duty to report touting to the police", he concluded.
Pieter Vorster, General Manager for Absa Home Loan Operations, estimates that over R300 million's worth of fraudulent home loan applications have been blocked by banks. "Losses from fraud in the home loan industry are often added to bad debt that has increased significantly over the last 18 months", he added.
Nedbank Home Loans General Manager for Special Projects, Risk and Compliance, Greg Salter, said that mortgage fraud is often perpetrated by extremely organised syndicates who use advanced technology to carry out their criminal activities.
Susan Coetzee, Sabric General Manager for Commercial Crimes Office, demonstrated to delegates how networked criminal activities and international fraud tends are perpetrated in South Africa. "Unfortunately", said Coetzee, "the risk of mortgage fraud is far less than risks involved in robbing a bank, and the proceeds can be much larger". Coetzee felt that the Korbitec Mortgage Fraud Seminar is a new milestone on the road to creating an industry that does not tolerate fraud.
Participants and speakers alike encouraged the organisers, Korbitec, to hold similar events nationally, pledging their full support for these events.
Dawie Verryne, General Manager
Korbitec Property Division