In2Perspective Mortgage Mis-Selling Uncovered
Written by JDPGlobal | Wednesday, 12 October 2005
Small mortgage brokers were criticised by the Financial Services Authority (FSA) for poor record keeping and recommending low-income borrowers take on more debt than they could afford. The watchdog commented that it had referred three firms to its enforcement unit for the purpose of investigation. This was done after it was found out that they were assisting people to obtain mortgages by means of inflating incomes on application forms.
31 small, sub-prime brokers were visited by FSA. Out of 210 cases files 60 per cent have not enough customer information and 80 per cent lacked evidence to show how a particular loan met the customer’s needs and circumstances. FSA's head of mortgage and credit union department said that it is not easy to establish the level of consumer detriment. This is so because many of the failings related to poor record keeping and brokers would be able to provide details when challenged. He further added that they would be searching for compliance with their requirement in the future.
