
Rogue lenders shamed by TCF crackdown
Daily news headlines
LONDON – The UK Financial Services Authority (FSA) has launched what it has said is “one of the biggest crackdowns in its history” to name and shame mortgage brokers that encourage house buyers to take on loans they cannot afford to repay.
The FSA crackdown comes after financial watchdogs revealed operational malpractice by mortgage brokers that irresponsibly push first-time buyers into ‘self-certification mortgages’ – where mortgagees need only state their income, without standard employer or credit history checks.
From a series of reviews made by the FSA as part of its Treating Customers Fairly (TCF) policy, it appears low-income house buyers with patchy credit histories have been encouraged to misrepresent their finances to qualify for bigger mortgages and get on the housing ladder.
“These practices are completely inconsistent with Treating Customers Fairly – hence the large number of enforcement referrals and other regulatory actions,” said Stephen Bland, who is leading the FSA’s mortgage broker supervision.
As the timetable for the FSA’s TCF implementation strategy is being accelerated, the FSA is racketing up pressure in the face of criticism that its regulation to date has lacked regulatory teeth.
The Council of Mortgage Lenders said the moves towards enforcement should serve as a wake-up call to mortgage brokers that fail to deliver fair treatment to their customers.
It has announced four firms must cease trading until they have reformed their selling practices. Seven more brokers have been referred for enforcement actions that could lead to heavy fines.
A further 10 firms have received a final warning before they too face similar action, and 65 brokers have been ordered to review thousands of mortgages they have sold over the past few years.
The announcement comes after two £10,500 fines were administered to Lawrence Scoffield Mortgages and Council Homebuyers (Midlands and North), and Mortgage Network Solutions’ publicly censure, for similar misconduct.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact [email protected] to find out more.
You are currently unable to copy this content. Please contact [email protected] to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
More on Regulation
Regulation
What lies beneath: Nomura’s iceberg balance sheet
Collateral received by the Japanese bank exceeds its total on-balance-sheet assets – does it matter?
Receive this by email