The FSA has taken action against two mortgage brokers for reckless business practises that allowed false and misleading mortgage applications to be made to lenders.
Ngozika Louise Ogboru, of Harrow-based mortgage broker J N Finance (UK) Limited, has been banned from carrying out any regulated activity and would have been fined £65,000 had it not been for evidence that the fine would have caused serious financial hardship.
Ronald Winton, of Mortgage Healthcare Limited in Dundee, has been fined £31,500 and banned from holding a senior position in a financial services firm for two years.
Ogburu was found to be running her business in an incompetent and irresponsible manner that allowed other advisers to commit mortgage fraud.
The FSA investigation found that, as the only approved person at the firm, Ogburu had failed to ensure that adequate systems and controls were implemented to monitor staff and prevent mortgage fraud.
The FSA discovered that other advisers at the firm were able to submit false mortgage applications using Ogboru's log-in details without her knowledge and that one employee was still using her details five months after his employment was terminated at JN Finance.
Despite obvious warnings that the firm was being used to commit mortgage fraud, Ogboru continued to run her business in the same irresponsible manner.
Winton was found to have failed to manage and monitor his firm's business properly as its sole director and approved person.
Winton ran a separate firm from different premises and had delegated day-to-day responsibility of Mortgage Healthcare Limited to two non-approved advisers.
The FSA had found in a previous visit that there was a concerning level of interest-only and self-cert mortgages on its books and a further visit showed Winton had taken no action to rectify the problems.
When interviewed by the FSA, Winton expressed concern that 65% of the firm's business was interest-only mortgages, but stated he had no control over this. He also admitted that advisers were still failing to check the feasibility of customers' repayment strategies for interest only sales.
The FSA found 14 out of 19 cases in which customers had submitted mortgage applications to lenders with false or misleading information about their incomes.
In addition, the FSA revealed problems with the suitability of advice given to customers and inadequate complaints handling procedures.
Mortgage Healthcare Limited has had its permissions removed and ceased trading.
Margaret Cole, director of enforcement and financial crime at the FSA, said: "FSA rules ensure that financial services firms operate safely, protecting both their customers and the industry itself. Anyone found flouting those rules will face stiff penalties.
"Ogboru and Winton were not of sufficient calibre to run their firms to the standards expected by the FSA, and as such have either been removed from the industry or prevented from holding senior positions."
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