Mortal dangers, moral hazard and mortgage lending by solicitors: an international perspective
Author: Middleton, David J.
Source: Journal of Financial Crime, Volume 10, Number 3, 2003 , pp. 255-268(14)
Publisher: Emerald Group Publishing Limited
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Abstract:
Reviews the regulation of solicitors; in the UK this is self-regulation by the Law Society. Discusses the widespread provision of financial services to clients by their solicitors, and legal cases in the UK and Australia that exemplify the mortal dangers involved in mortgage fraud and involve the Solicitors Disciplinary Tribunal; these involved misappropriation and secret profits, excessive loans, failure to keep clients informed, and close association between solicitor and borrower. Mentions the Hodgson Report in Australia, which in 2002 commented on such problems. Moves on to the S&L insolvency scandal in the USA after deregulation in 1982, and finds parallels with the UK solicitor mortgage investment schemes, even though the US schemes were run by financial institutions with their own regulators. Concludes that mortgage investment schemes must be closely regulated so that investors know the true cost of loans and any profits taken by the lawyer.Keywords: Australia; Fraud; Laws and legislation; Lawyers; Lending services; Mortgage companies; United Kingdom; United States of America
Document Type: Research article
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