FSA shuts down mortgage broker
Sunday 25 November 2007
The Financial Services Authority (FSA) has ordered the closure of one mortgage broker and fined two others for mis-selling sub-prime home loans.
Redditch-based Homebuyer Securities was closed down when it was found that its advisers were not qualified to give financial advice.
Meanwhile, The Loan Company, based in Cheshire, was fined £31,500 for giving "inconsistent" information to clients and not properly checking that they could really afford their mortgages. Next Generation Mortgages, based in Cardiff, was fined £10,500 for failing to explain the risks of sub-prime loans to its clients.
The companies fell foul of the regulator following a year-long FSA investigation of the UK sub-prime mortgage market. This type of loan is sold to people who have poor credit histories or do not have steady jobs.
Widespread mis-selling of the mortgages in the US has prompted high levels of repossession and a collapse in confidence in the money markets.
Margaret Cole, head of enforcement at the FSA, said the regulator was determined to stamp out any similar activity in the UK.
"Any firms who place their customers at risk of receiving unsuitable advice through inadequate business processes can expect strong action from the FSA," she warned.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
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