Letter to Financial Service Providers Regarding Mortgage Fraud Responsibilities

Authority for the Financial Markets (AFM)
Chamber of Commerce Amsterdam, no. 41207759
Reference of this letter: SeBm-25065861
Visit address Vijzelgracht 50
P.O. Box 11723 • 1001 GS Amsterdam
Telephone +31 (0)20-7972000 • www.afm.nl
AFM - Public
Sent via regular post
To all financial service providers with a license for advising/brokering in mortgage credit JaS.A.MSeBm-25065861 - Responsibilities regarding mortgage fraud Date 23 June 2025 Subject Responsibilities regarding mortgage fraud Dear Board, The Authority for the Financial Markets (AFM) would like to draw your attention to the prevention of mortgage fraud. We are receiving an increasing number of signals indicating mortgage fraud in financial services. As a financial service provider with a license for advising and/or brokering mortgage credit, you play an essential role in recognizing, preventing, and reporting mortgage fraud. With this letter, the AFM aims to help you stay alert and clarify what we expect from you, so that you can avoid becoming involuntarily involved. You can also find extensive and practical information via the link and QR code at the bottom of this letter.

What is mortgage fraud?
The AFM defines mortgage fraud as any form of deception or falsification of documents, with the aim of causing the mortgage credit provider to believe that they are factually correct. This may involve, for example, falsified tax returns, turnover data, payslips, fictitious employment relationships, or a manipulated valuation. The AFM receives reports regarding financial service providers who (unintentionally) facilitate the commission of mortgage fraud by forwarding false documents to a mortgage credit provider.

Prevent unintentional involvement in mortgage fraud Every financial service provider can become involved in mortgage fraud; this can also happen unintentionally and unconsciously. Thus, the AFM observes financial service providers whose license is used for fraud, for example, in collaboration with freelancers, accounting firms, or sub-brokers.

Mortgage fraud can have significant negative consequences for all parties It is important to be aware that mortgage fraud can have significant negative consequences. It affects not only the integrity of the financial markets as a whole, but it can also have major (commercial) repercussions for mortgage credit providers, consumers, and your own business. For instance, mortgage credit providers may terminate the cooperation agreement with you, depending on the contractual terms. Involvement in mortgage fraud can also lead to reputational damage.

What can you do to prevent fraud?
By being aware of the risks of fraud and limiting them, you can protect both yourself and your customers. Keep your business operations fraud-resistant and up to date. What can you do, among other things?

• Conduct a critical assessment of the accuracy and completeness of all documents provided for the mortgage application. This is your own responsibility.
• Be aware of risks in collaborations with, for example, freelancers or accounting firms, and take appropriate measures. Ensure that you continuously critically assess and monitor the collaboration. After all, actions are taken under your license, and you remain ultimately responsible.
• Ensure clear and transparent client identification and appropriate advice. You have an independent identification obligation and are responsible for mapping all relevant data, characteristics, wishes, and needs of the client, so that you can provide appropriate advice. This also applies when the applicant does not speak Dutch well. Ensure that the applicant fully understands your advice.
• Report incidents and misconduct to the AFM; there is a statutory reporting obligation. Via the link and QR code at the bottom, you can find more information about this. An example of an incident or misconduct is if you discover in a mortgage application that documents have been falsified by a freelancer or sub-broker.

What does the AFM do in relation to mortgage fraud?
There has been intensified attention from multiple quarters regarding (the risks of) mortgage fraud. The AFM pays special attention to mortgage fraud and the role that financial service providers can play in this within its supervision, and will continue to do so in the future. Only through vigilance regarding the risks of mortgage fraud at all stages of the application process can mortgage fraud be prevented and addressed. Thus, we work together towards a fair and transparent financial sector.

Want to know more?
More information is available at www.afm.nl/hypotheekfraude regarding what to watch out for to prevent mortgage fraud, what your responsibilities are, and what is expected of you. More information regarding the reporting obligation can also be found here.
By scanning the QR code, you can go directly to the website.

Sincerely,
Authority for the Financial Markets
Jan Boerboom Tom Smiers
Head Manager
Market Integrity and Enforcement Market Integrity and Enforcement