Tahir Mahmood, a mortgage broker banned from conducting regulated business by the FSA for falsifying incomes, suggests the regulator would find many more brokers guilty of the crime if it stepped up its checks.
Mahmood told IFAonline lenders should increase their income multiples to ten times in most cases, possibly to meet the high costs of property in the UK.
Yesterday, the FSA announced Mahmood and his partner, Amjad Malik, were banned for falsifying incomes and occupations of clients on mortgage applications.
However, Mahmood hit back, saying: “The FSA should check 10 files of every broker in the mortgage industry and the income declared on the application should be verified by the Inland Revenue.
“Then the FSA would find out how many applicants declared their genuine income compared to how many applicants and mortgage brokers had submitted correct and genuine information.”
He suggests lenders would find many genuine income multiples are often several times higher than they had first thought, perhaps due to highly unaffordable property prices in the UK.
Mahmood also insists that the FSA should performs tighter checks on income details, and lenders should increase their income multiples to make it easier for clients to get accepted.
The FSA has already indicated there is a fraud problem amongst some mortgage brokers and has received over 200 cases of suspected fraud from lenders, with around a third of those to be submitted to its enforcement division.
If you would like to comment on this story, contact:
Tel: 020 7484 9805
e-mail: [email protected]
Have Your Say:
"I personally take offence. He has no right to 'tar everyone with the same brush' as he appears to be doing." Dave Walton, Fehnert Financial Services Limited
"I have been in the financial services industry for 29 years and I have never falsified incomes. I agree with the previous comment I find it deeply insulting for Mr Mahood to make such accusations, all the applictions that I submit have P60's and wage slips attached. The industry is best rid of such people." Roger Holloway, J B Financial Services
"I also find this assertion deeply insulting. These sleazeballs need drumming out." Simon Kearney
"My comments on the above are that it may well be all the adviser’s he knows are guilty, but certainly we aren't and I don’t have any doubts about ANYONE I have worked with before. That may well be why myself, friends and colleagues had applications declined where others were getting them accepted. He deserves to be struck off, however I would say that a large number of lenders are complicit and have been turning a blind eye because it suited them. Those of us who worked in Financial Services through the period of 1988 to 1992 know just how important affordability is and allowing a client to borrowing the number of earninsg this gentleman was doing, UNLESS the client was opting for a a 15 to 25 year fixed rate was criminal. Brokers and lenders who were arranging short term discounts on high income multiples when the client had no hope of a significant jump in income due to promotion etc when interest rates have been at historically low rates in the UK with every possibility of a massive increase, should be shot! Credit where credit’s due, it sounds like the FSA may have done the right thing for once, but I would like to see every single provider who provided this firm’s clients files checked for complicity and contributory negligence." Phil Castle, Financial Escape Ltd
"As I understand it this 'gentleman' was supplying his own forged payslips etc. It seems that most of the brokers who are banned would be crooks in whatever line of business they were in. It's just a shame that they happen to be in ours!" James Town
"This outburst is typical of many many so called 'Brokers' we have all rubbed elbows with in our pasts. They're the same ilk as some that I heard in FS workshops years ago, asking if it was possible to 'lose' the hard disclosure in a KFI document. The regulator may be working towards principle based regulation, but that means we have to create our own rules to avoid being tarnished by rants from the likes of the low-lives, hence our standard opening email request for payslips AND bank statements, even if the case DOES fit 'Fast-Track' criteria. Who in their right mind would want to operate in the shadows inhabited by these two unless they are crooked through and through?" Derek Frost, The Melia Partnership
"His comment is disgraceful. Good riddance to him! I have for many years been up against these brokers, lenders who are complicit and lender business development managers who have actively encouraged fraud using the line "just say this because we never check it's absolutely fine......" but who become very shirty when asked to put it in writing. I have even lost clients who thought I was not a good broker because my deal was higher cost as legitimately researched, whereas the other broker was clearly falsifying the incomes but not telling the client (something they can easily do with electronic applications now). I have no great love of the FSA but all I have ever wanted was a level playing field and the cheats removed from the system and now it looks like it may happen and a good thing too. Then the lenders will have to be honest with their products and income multiples rather than turning a blind eye but doing a "nothing to do with us guv it's these dodgy brokers" if it all goes wrong and the media or government start investigating." Paul Clift, GSS Financial Planning
"I read a lot in the press about my industry some of which I agree with and some of which I do not, but I have to say that the comments from Tahir Mahmood are absolutely disgraceful. This man is not only happy with being banned by the FSA for his deplorable activities but he also wants to drag the industry into it with him as if this is in some way going to add credibility to his actions. I have a firm with multiple advisors and I am positive beyond a shadow of doubt that they have always acted not only with the best interests of the client but also well within the spirit of the law. This man tries to infer that he is in some way providing a benefit to these clients by getting them 10 times income and as such is doing nothing inappropriate. I want to say now to all advisors that don’t already realise, this is a fallacy, by putting people into a mortgage that is upwards of 10 times their income is not beneficial to them. They not only run the risk of losing their home and as such being unable to buy another one for a long period of time but also they, and many others are also fueling the situation of rising house prices that has forced them to take these actions in the first place. It is an obvious example of a vicious circle and one that Tahir Mahmood is trying to normalise for his own benefit. It is always sad to see another scandal in the industry and also see someone kicked out as a result but by the looks of it he does seem to have brought it upon himself." Chris Clare, Mortgage Route
"How typical of someone who has been found out falsifying incomes on mortgage applications to pretend that everyone does it. He ought to have the sense to realise that falsifying income details on a mortgage application is an attempt to obtain money under false pretences, which is a criminal offence. Your article says that “Mahmood told IFA online lenders should increase their income multiples to ten times in most cases, possibly to meet the high costs of property in the UK.” If he really did say that he ought to have his head examined. He has clearly given no thought to how anyone could possibly afford to meet their mortgage payments, in which case he does not understand the IFA’s responsibility to make sure that any advice he or she gives is affordable." John Pickles, Director, Globe Independent Financial Advisers LtdIFAonline
Regular reminders and updates
9 December 2019 deadline
Joe McDonnell joins as head of portfolio solutions (EMEA)
Adviser of the Year - South East
Fidelity Multi Asset CIO's outlook