The Financial Services Authority has fined Home and County Mortgages Limited £52,500 for management failures and a lack of skill, care and diligence.
The FSA found that one of HCML’s advisers had inflated customers’ incomes on mortgage applications and that HCML did not act quickly and appropriately to deal with the matter.
There were also weaknesses in HCML’s sales processes, including retention of customers’ income verification documents to show affordability. This put customers at risk of receiving unsuitable advice.
A further failure was not to disclose to customers the true cost of the single premium payment protection insurance policies it recommended.
HCML also failed to ensure in every case that staff followed its complaints handling process correctly and that all complaints were dealt with consistently.
Other recent action taken against mortgage brokers includes Rainbow Homeloans, Best Advice Mortgage Network Limited, Paramjit Singh Bali, John Vincent Burton, Regency Mortgage Corporation Limited and Capital Mortgage Connections Ltd.
FSA head of retail enforcement Jonathan Phelan says: “Inflating customers’ incomes when applying for a mortgage is unacceptable. It puts customers at risk of losing their homes if they are not able to meet their mortgage repayments. It amounts to making false declarations to lenders on behalf of customers, the consequence of which could be very serious for customers.”
“HCML has been given a significant penalty for breaches of FSA principles, reflecting the seriousness of the misconduct and the risks posed to its customers arising from the management failures.”