The FSA has banned one mortgage broker and fined two others for sub-prime failings, it announced this morning.
The regulator says Homebuyer Securities Limited (HSL), which has been banned, The Loan Company (TLC), trading as Greenhill Finance, and Next Generation Mortgages Limited (NGM), had failed to meet its expectations during an investigation into the sub-prime market in July.
It says all three firms had inadequate mortgage sales and advice procedures that exposed customers to the risk of receiving unsuitable advice.
Homebuyer Securities has been prevented from trading by the FSA, while The Loan Company has been fined £31,500. Next Generation Mortgages was fined £10,500.
HSL’s ban resulted from the firm failing to ensure all its advisers were qualified to give mortgage advice and the firm’s director will never work as a mortgage broker again.
NGM failed to demonstrate why recommendations were made and did not fully explain risks to its customer, while TLC did not train staff to an adequate level and gave customers inconsistent information.
Both TLC and NGM did not keep proper records and did not gather adequate customer information to assess suitability.
NGM has agreed not to sell self-certification mortgage in future and all firms will need to review past sales to identify customers who may have suffered losses.
Margaret Cole, director of enforcement at the FSA, says: "Firms who do not comply with FSA standards taint the entire mortgage industry which is totally unacceptable.
"Any firms who place their customers at risk of receiving unsuitable advice through inadequate business processes can expect strong action from the FSA.”
So far, the FSA’s review of sub-prime mortgage selling has resulted in enforcement action against five firms.
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