Digital mortgages ‘should reduce risk of fraud’, claims business secretary
Digital signature process will use GOV.UK Verify and HM Land Registry’s own digital tools
Credit: Edward Smith/EMPICS Entertainment
The government’s soon-to-launch digital mortgage could help reduce fraud, business secretary Greg Clark has claimed.
Clark last week presented to parliament a written ministerial statement detailing the potential financial liability for the government that could stem from the launch of the new service. Presenting such a statement, in this case on behalf of HM Land Registry (HMLR), is customary in cases where “a government department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority”, Clark said.
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The launch of an online mortgage service presents a new form of liability because the process of certifying borrowers’ identity digitally is not covered by mortgage fraud compensation schemes currently on HMLR’s statute books. But the business secretary said that, not only is the risk of additional liabilities resulting from the launch of the service “considered low”, but that digital mortgages ought to actually be less susceptible to fraud than their physical counterparts.
“The new process, where the borrower’s identity has to be verified through GOV.UK Verify combined with HMLR’s independent security processes, should in fact reduce the overall risk of fraud,” he said. “To date, GOV.UK Verify has not identified a single example of fraud despite in excess of 1.25 million citizens’ accounts having been created using the GOV.UK Verify service.”
If no objections are raised by MPs in the next few weeks, then Clark will authorise the department to take the new liability on. The digital mortgage service is scheduled to launch at some point in 2018.
Clark concluded: “The government will be taking further steps to improve the home buying and selling process, following the publication last year of a call for evidence.”
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