Credit checking law firms and monitoring the timeliness with which they register charges are among measures being considered and in some cases adopted by lenders seeking to clamp down on mortgage fraud.

One large lender is also demanding the introduction of a compulsory scheme under which lenders would be obliged to tell regulators when they suspect a solicitor is involved in mortgage fraud.

These were among the findings of a ‘thematic review’ published last week by watchdog the Financial Services Authority, assessing the adequacy of lenders’ systems to detect and prevent mortgage fraud.

Although the study found that lenders have made improvements in managing their relationships with solicitors, many still identify solicitors as their largest single source of mortgage fraud risk.

Lenders are responding to this perceived risk in diverse ways, the study found.

Some larger lenders are ejecting from their panels dormant firms, and practices with low volumes.

Others are undertaking basic checks, such as conducting Google searches before appointing a new panel member, and requiring solicitor firms to attend regular performance management meetings.

One small lender would only accept on to its panel firms with two partners or more who had practised for at least two years.

This ‘reflected the difficulty of claiming for fraud losses’ against professional indemnity insurance policies taken out by small practices.

The study also assessed the impact of the FSA’s Information from Lenders scheme, a voluntary initiative that enables lenders to tell the FSA about intermediaries suspected of being involved in mortgage fraud.

Senior management at one large lender said a ‘similar’ but compulsory scheme should be introduced to force lenders to report concerns about ­solicitors.

Many lenders identified the time taken by solicitors to register charges over property with the Land Registry as a key fraud indicator, and were tightening up monitoring of this area.