'Incompetent' Broker Banned By FSA
Mortgage Broker
10/07/2008
A mortgage broker whose firm recommended sub-prime loans to people who may have qualified for mainstream products has been banned and fined, the City watchdog has said.
The broker had exposed around 500 customers to the risk of receiving unsuitable advice, the Financial Services Authority (FSA) revealed.
People were advised to take out mortgages which were not suitable, given their needs and circumstances. Some were urged to sign up for sub-prime mortgages, aimed at people with poor credit records and which charge higher rates, when it appeared they could have opted for a mainstream loan.
The FSA found that the broker also failed to ensure the firm adequately disclosed to customers the level of fees it was being paid and it did not keep adequate records on why the mortgage recommended was affordable and suitable for the borrower.
The broker was banned from trading as a broker due to his lack of competence and capability, and for failing to have proper systems and controls in place, the FSA said. He was also fined £17,500 for failing to organise the firms affairs "effectively and responsibly", and failing to ensure it met the required standards when recommending mortgages.
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