FSA bans mortgage broker for failing to prevent fraud
Share
The Financial Services Authority has banned a London-based mortgage broker for failing to prevent his business being targeted by mortgage fraudsters.
An investigation by the regulator found Walthamstow mortgage broker Kevin Byrne accepted mortgage referrals from an introducer but failed to undertake the due-diligence or basic checks on the client information supplied. This led to Byrne submitting seven false and misleading mortgage applications, with at least one customer not existing.
Byrne also certified supporting documents without seeing the originals. Incorrect information as a result of this included a bank statement for one applicant that contained different sort codes and account numbers on different pages; two applications with false passports and payslips supposedly from two different employers with identical information.
Byrne confessed that no checks were in place at Forest Financial to reduce the chance of the business being used to commit mortgage fraud. Bryrne has now been prohibited and as the only adviser at Forest Financial the regulator has also cancelled the permissions of the firm.
FSA director of enforcement and financial crime Margaret Cole says: “Byrne acted recklessly by accepting business from introducers without undertaking any due diligence. This made him an easy target for the introducer to obtain mortgage advances from lenders on a fraudulent basis, which could have been prevented if Forest Financial had put in place basic financial crime checks.
“Byrne is paying a heavy but necessary price. This prohibition serves as another warning to mortgage brokers who accept business from introducers in suspicious circumstances without doing the proper checks.”
Readers' comments (9)
PensionMan | 15 Feb 2010 3:28 pm
What is happening in the mortgage intermediary market at the moment?
It seems that there is a mortgage broker being fined / banned every other day!! Is that all the FSA do nowadays?
Unsuitable or offensive? Report this comment
Incompetent Regulators Awards Team | 15 Feb 2010 3:34 pm
Oi pension man. Haven't you realised that the FSA are good at nothing apart from destroying everything that is good in the financial arena?
The FSA can't evenm spot fraud under their own noses. Pot calling the kettle black I think.
Unsuitable or offensive? Report this comment
Anonymous | 15 Feb 2010 3:46 pm
Most of these cases have come about following the TCF assessments which gave the FSA an opportunity to take a wider view of all mortgage brokers and to dig deeper if they felt it was necessary.
When you look at the number of cases, and there are sure to be some more, it's not that many compared to the number of brokers being regulated.
Unsuitable or offensive? Report this comment
Incompetent Award | 15 Feb 2010 3:51 pm
Maybe the FSA cant spot fraud under their noses but you spelt even wrong!!!!
Unsuitable or offensive? Report this comment
Hugh jeego | 15 Feb 2010 4:03 pm
Now now girls, calm down. This is just another example of the FSA failing to tackle the guilty parties. It was the lenders who came up with the idea of "self certification" not the advisers. They also came up with the idea of indemnity commission and broker bonds many years ago which eventually led to our friends at canary Wharf being empowered. Do not expect a change in the future.
Unsuitable or offensive? Report this comment
Roy | 15 Feb 2010 9:09 pm
Incompetent Award, its can't not cant.
Unsuitable or offensive? Report this comment
Chris | 16 Feb 2010 2:46 am
Eh? What are these comments all about? The FSA finds a mortgage broker involved involved in fraud (one client was non-existent for heavens sake!) and so bans him. Most people would say - well spotted by the FSA, and well done on correct action. Yet Incompetent Regulator Awards Team thinks he was "everything that is good in Financial Sevices"! And Pensions Man wonders why so many mortgage brokers are getting banned - maybe it's because there are some dodgy ones and the FSA is simply doing its job!!
Look, if you are doing your job properly, then the FSA is likely to be your "friend", not least in the way that by clearing out the cowboys, they create a better impression of those that are left. Don't defend the crooks and the frauds - you make yourself look dodgy when you do.
Unsuitable or offensive? Report this comment
Big Girl Blouse | 16 Feb 2010 6:51 am
FSA desrves more bonuses for doing their job so well, the last few year bonuses paid to them in millions should be increased now to billions well done FSA for saving the country and banks from these billionniare fraudsters.
Unsuitable or offensive? Report this comment
Anonymous | 16 Feb 2010 8:33 am
I understand the 'here we go again' attitude of the first few bloggers, as it does seem that at least one broker is banned every day. However, I am surprised to see that some were shocked that a Mortgage Broker who didn't properly check out his clients and allowed false app to be submitted would be banned. I work with Brokers all day every day. The one thing I do know about the vast majority is that they will think hard about the compliance implications of going to the loo before they do it, never mind accepting and placing leads. Bryne knew that he wasn't doing his job correctly when he did it. The person sending him the leads 'picked him out' to use as his middle man. He either didn't have the necessary training, or was too busy to do the job correctly (what a great position to be in!!) or didn't care. Either way, he tarnishes an industry that thousands of brokers work in, correctly and compliantly and risks more consumer 'lack of confidence' in a market where the broker is king as the Banks and government have robbed them, and their kids of a financially secure future in the UK. Your industry has to celebrate getting rid of those who will bring you down.
Unsuitable or offensive? Report this comment