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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Dangerous waters
The banks were fined you ignoramus. Speaking of ignorant people, I am very glad to see that these two have been reprimanded. It is about time that incompetent sharks are being held accountable for their reckless behaviour. I'm sure neither of them had given a second thought to those poor souls who have paid for their 'advice'. They're lucky that they have emerged relatively unscathed, avoiding legal actions being taken against them.
Posted by: Anon.
Dangerous waters
The banks were fined you ignoramus. Speaking of ignorant people, I am very glad to see that these two have been reprimanded. It is about time that incompetent sharks are being held accountable for their reckless behaviour. I'm sure neither of them had given a second thought to those poor souls who have paid for their 'advice'. They're lucky that they have emerged relatively unscathed, avoiding legal actions being taken against them.
Posted by: Anon.
Dangerous waters
The banks were fined you ignoramus. Speaking of ignorant people, I am very glad to see that these two have been reprimanded. It is about time that incompetent sharks are being held accountable for their reckless behaviour. I'm sure neither of them had given a second thought to those poor souls who have paid for their 'advice'. They're lucky that they have emerged relatively unscathed, avoiding legal actions being taken against them.
Posted by: Anon.
Dangerous waters
The banks were fined you ignoramus. Speaking of ignorant people, I am very glad to see that these two have been reprimanded. It is about time that incompetent sharks are being held accountable for their reckless behaviour. I'm sure neither of them had given a second thought to those poor souls who have paid for their 'advice'. They're lucky that they have emerged relatively unscathed, avoiding legal actions being taken against them.
Posted by: Anon.
Dangerous waters
The banks were fined you ignoramus. Speaking of ignorant people, I am very glad to see that these two have been reprimanded. It is about time that incompetent sharks are being held accountable for their reckless behaviour. I'm sure neither of them had given a second thought to those poor souls who have paid for their 'advice'. They're lucky that they have emerged relatively unscathed, avoiding legal actions being taken against them.
Posted by: Anon.
sub-prime
Joanna, You sound like the sort of person who believes it is alright to shoplift from Marks and Spencer but not from the corner shop. Fraud is fraud, regardless of the size of the organization undertaking it. Are you too stupid to see that these cases are the whole global sub-prime debacle in miniature? One of the judgements says "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". That is fraud, pure and simple, and I would be dissappointed if a criminal cases do not follow. Reading further into it Mortgage Healthcare sold over 2,180 mortgages at £495 commission each. That's a cool million plus in commission over 4 years, hardly an insignificant amount. Nice work if you can get it, but most people earn an honest crust, not a criminally fraudulent one. This outfit would obviously have ignored any help from the FSA, as you suggest, as peopled know when they are doing right or wrong. Some people are just bent. The less outfits around like this the better it will be for decent, honest citizens.
Posted by: Anon
what about the advisors of mortgage healthcare
the 2 main advisors of the mortagehealth care were the ones carrying out 65% only mortgages and so called self cert mortgages, they are still trading and no doubt carrying on with how they conduted business before. The people of Dundee and Fife are still exposed to these individuals and this is the FSA fault. They have not dealt with the root cause of this misselling scandal. Once again the FSA fail to protect the public.
Posted by: anon
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FSA
nice to see the small business are targerted once again. Why don't the FSA put the regulations in place and help the businesses adhere to these regulations. I don't remember reading that the banks got any fines when they were (and probably still) not following proper protocol. When you read stories like the one above its any wonder anyone starts uo their own business because there are always people out to get you.
Posted by: Joanna