The Financial Services Authority (FSA) yesterday banned the latest in a soaring number of mortgage dealers found guilty of submitting fraudulent borrowing applications.
The west London mortgage broker Asim Hussain is no longer permitted to sell mortgages, after the regulator found that he had personally applied for a mortgage through his company based on a heavily exaggerated income declaration, and that 18 other applications on behalf of clients stated significantly altered incomes.
So far this year, the FSA has banned 19 mortgage brokers for involvement in submitting false mortgage applications, as it cracks down on mortgage fraud. Another 24 cases are under investigation and others are "in the pipeline." This is up from five bans in 2007 and two in 2006.
Since mortgage selling became a regulated activity in 2004, the FSA has received over 300 tip-offs from lenders, brokers and customers of suspected or proven mortgage fraud. Robin Gordon-Walker, a spokesman for the FSA said: "The penalty for mortgage fraud is assessed on a case-by-case basis but involves an almost automatic ban, and a fine if there are assets to be got. There is no upper limit on the fine, which depends on the severity of the fraudulent activity, the ability to pay, and the potential for the case to act as a deterrent. We have fined two individuals at least £100,000 already this year."
The spokesman admitted it was impossible to say whether the increase in cases was due to an increase in fraudulent activity or the introduction of the regulator's tip-off scheme in 2006. "We are allocating much more resources to catching these mortgage brokers, and we are now investigating a larger number of cases, but we hope there are not that many still to be caught." he said. "There will be some out there but we hope these bans mean people are put off starting down this route. Our message is that if you step out of line we will ban you."Reuse content