The FSA has fined one mortgage broker £31,500 and banned another for reckless business practices which allowed false and misleading mortgage applications to be made to lenders.
Ngozika Louise Ogboru who ran J N Finance (UK) Limited, a mortgage broking firm based in Harrow, has been banned from carrying out any regulated activity.
Ronald Winton from Mortgage Healthcare Limited in Dundee has been fined £31,500, and will not be able to hold a senior position in a financial services firm for two years.
Ogboru was the only approved person at the firm and was responsible for implementing adequate systems and controls to properly monitor staff and prevent mortgage fraud.
But the FSA found that advisers at the firm were able to submit false and misleading mortgage applications to lenders using Ogboru’s log-in details, without her prior knowledge. An employee was still using her log-in details five months after his employment was terminated.
Ogboru admitted incompetence in running her firm and considered reducing JN Finance’s permissions so that it could no longer arrange mortgages.
However the business continued to be run in the same way.
Winton also had ultimate responsibility for managing and monitoring his Dundee-based mortgage and general insurance firm.
He ran a separate business from different premises, and delegated day-to-day responsibility of Mortgage Healthcare Limited to two non-approved advisers. A previous FSA visit to the firm identified concerns at the level of interest-only and self-cert mortgages. During a further visit, the FSA found no evidence that Winton had taken any action to rectify the problems.
Winton told the FSA he was concerned that 65 per cent 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 identified 14 out of 19 cases in which it appears that customers submitted mortgage applications to lenders which contained false or misleading information about their incomes.
The regulator also found problems with the suitability of advice given to customers and inadequate complaints handling procedures. Mortgage Healthcare Limited has had its permissions removed and has ceased trading.
FSA director of enforcement and financial crime Margaret Cole says: “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.”
Ogboru has been banned from the industry, and would have been fined £65,000 had it not been for evidence that the fine would have caused serious financial hardship.