£30,000 fine for mortgage broker
A mortgage broker from the UK has been fined a massive £30,000 by authorities after being accused of giving advice that put consumers at risk during the ongoing global credit crunch and financial crisis. William John Evans, along with a fellow director from Abbey Mortgages, were fined by the Financial Services Authority earlier this month. The FSA is exercising an ongoing crackdown on unscrupulous lenders and brokers given the current financial climate and the state of the housing and mortgage markets.
Having analysed a sample of around 113 cases between January of 2006 and April of 2008 officials from the UK’s financial regulator found that Abbey Mortgages Ltd had not met the standard required. Mr Evans was found to have carried out inadequate checks with regards to whether the customers were earning the income that they claimed to earn, which led to customers taking on mortgages that they could not afford repayments on.
The standard FSA fine is £50,000 but the directors were unable to afford this, and instead opted for the high cost review instead. The two directors avoided a fine of £42,000 each by agreeing to pay the fine as quickly as possible.
Mr Evans stated: “The cases they were concerned about we have to pay for an independent company to do a full review to make sure there was no detriment to our clients. This couldn’t have come at a worse time with the market in the state it is. We’re not short of enquiries, we’re just short of mortgages for them.”
An FSA official said: “Obtaining and clearly recording the right information from customers is not just about process. It is an important step in preventing financial crime and giving customers the right advice and treating them fairly. This is always important but is especially important in difficult economic times.”
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It’s good that something is being done to help ensure that consumers are getting good services. It’s hard to find a good mortgage company sometimes. It’s good to know that steps are being taken to try and make it easier.
I’m just glad mortgage rates are dropping here in Australia, after the constant rises under the previous conservative government, it’s nice to be paying a little less at last!
I’m glad the FSA are looking into the larger companies not just the small mortgage brokers, maybe this action would stop problems at consumer level, but nothing for the cause of the credit crunch..
The credit crunch was caused by the investment banks getting out of control with speculative trading and banks buying up so called asset books (mortgage contracts) With a culture in the industry of say nothing negative about it or face the consequences it ran out of control.