Lie-to-Buy Mortgage Brokers & the FSA.

FraudBuster

They are being fined for compliance shortcommings.

4.3 The following evidence gathered from three mortgage client files supports the FSA’s finding that you knowingly provided inaccurate and misleading information, including inflated incomes on fact finds and/or mortgage applications submitted to lenders on behalf of your clients:

koexelek

MissMoneypenny wrote: »

Did the banks commit fraud?

Definitely. Some of them actively encouraged fraud, and promised to turn a blind eye to it.

For example, I was once visited by the Business Development Manager of one of the main UK lenders. He told me that if I was going to send in false payslips, I should screw them up a bit or spill a bit of coffee on them to make them look more realistic for the file :eek:

Although prison life isn't too bad these days, with Sky and Playstations in your cell, and the prisoner officers on hand to fetch you take aways when you are hungry........I didn't really fancy being away from my family, so I passed on that suggestion

FraudBuster

FSA/PN/019/2009
30 January 2009
The Financial Services Authority (FSA) has fined Nottingham mortgage broking firm Gillen Farrelly Independent Advisers Limited (“Gillen Farrelly”) £17,500 for failing to ensure it provided suitable advice which exposed over 80 customers to the risk of being sold an unsuitable self-certified mortgage.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/019.shtml

FraudBuster

FSA/PN/027/2009
16 February 2009
The Financial Services Authority (FSA) has today published a Final Notice banning mortgage broker Leo Kusi-Appiah, who was recently jailed after pleading guilty at St Albans Crown Court to obtaining property by deception in connection with mortgage fraud.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/027.shtml

mic200202

Interesting that all the brokers are directly authorised which shows where the FSA's light is shining at the moment. My observation on this is that at least these guys are accountable for their actions and have been brought to book. Can the same be said for those AR's out there hiding in the shadows?I do hope that the FSA takes the same approach to INDIVIDUAL AR firms (ie not with Head Office reports) and see what's happening on the ground. I know of one broker who was 'invited to leave' an AR (how they get round the rules) after fraud investigation,banned by at least one major lender, yet was able to join PTFS with little apparent trouble. From the general publics point of view, this rogue is absolutely untraceable,and unaccountable. I do hope Fraud Buster takes this into account when publishing the names of individual firms - how many more out there are unaccountable AR's not on the register, getting away with it.

koexelek

dunstonh wrote: »

Its good to see that the FSA are identifying failures. However, you do get the feeling that picking on the odd small firm here and there and ignoring the banks is a bit pathetic.

Post of the week for me:T

Some lenders actively encouraged fraud, going as far as to tell brokers how to falsify applications to make them go through:eek:

mic200202

dunstonh wrote: »

Its good to see that the FSA are identifying failures. However, you do get the feeling that picking on the odd small firm here and there and ignoring the banks is a bit pathetic.

Agreed.Interesting to see the treasury select committee the other week.Those guys were surely approved persons? Unqualified at that.They lose billions of £'s and cause economic havoc yet all that happens is they get to say 'sorry' in public? If a DA firm gets its paperwork wrong the FSA can and does sanction at will.Makes you wonder.

MissMoneypenny

koexelek wrote: »

Definitely. Some of them actively encouraged fraud, and promised to turn a blind eye to it.

If, by turning a blind eye, they didn't commit fraud, then they are in the clear.

Some bankers, brokers and borrowers however will have committed fraud. In a falling market, I doubt the banks will still be turning a blind eye to those who committed fraud (a criminal offence).

http://forums.moneysavingexpert.com/showthread.html?t=1493575

koexelek

MissMoneypenny wrote: »

If, by turning a blind eye, they didn't commit fraud, then they are in the clear.

Some bankers, brokers and borrowers however will have committed fraud. In a falling market, I doubt the banks will still be turning a blind eye to those who committed fraud (a criminal offence).

http://forums.moneysavingexpert.com/showthread.html?t=1493575

The lenders not choosing to check borrowers incomes is one thing, but actively telling brokers how to get cases through the system that should have been refused is something different.
Of course, they never but it in writing, but a lot of their reps told us verbally what needed to be done, and even showed us sales aids, such as " believable incomes" to put down for certain professions
:eek:

on ocasions, I have even been told my lenders that they will guarantee not to check the clients income if they agreed to take out an insurance policy with them, as well as the mortgage

I have never ever arranged a mortgage for a client where I was not happy that a borrower could afford the payments, but I know brokers in the industry who openly boasted of getting someone 10 times income by using the lender's own tips

A lot of the high street lenders that are so called " pillars of society" are very corrupt organisations, believe me.

dunstonh

I had an AXA sales rep visit me a month or so back. He was trying to encourage me to break FSA rule RU64 and do things that the FSA had only reported on a month earlier as being a rule breach. Needless to say, he wont be seeing me again.

If I had done what he said, I would face the disciplinary action and have to pay the fines and redress. AXA would get away with it. That is not the first time a sales rep from a product provider has suggested breaking the rules. Standard Life did it many years back.

There are two arguments to this, advisers should know better and be responsible. However, product providers shouldn't allow their staff to actively encourage rule breaches in an attempt to get new business.