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FSA warns it will seek out loan rogues

The FSA has warned mortgage brokers that it is ready to get tough and use its enforcement regime to force rogue firms out of the market.

Speaking at the Association of Mortgage Intermediaries’ annual dinner in London last week, FSA chairman Sir Callum McCarthy said it is vital to get tougher on the mortgage market so the law-abiding major-ity are rid of the rule-breakers.

McCarthy said the regulator is taking strong action against mortgage firms behind closed doors despite queries from industry commentators and brokers about a lack of enforcement action in the sector.

His speech appears to validate predictions made by Buil-ding Societies’ Association spokeswoman Rachel Blackmore and London & Country head of communications David Hollingworth at Money Marketing Live last month, in which both predicted that the FSA is likely to show its teeth later this year.

McCarthy said: “I think it is appropriate that we add to our continuing emphasis on education a greater use of enforcement in selected cases, just as we have already taken firm action against the small number of mortgage firms which have tried to do unauthorised business. It is important for the law-abiding majority that those who persist in non-compliant behaviour should be stopped. Our research, and various mystery shopping tests, show scope for considerable improvement and brokers should expect the FSA to take action.”

Premier Mortgage Service managing director John Malone says: “This is big news to those who have only recently come into a regulated environment but for those of us that have been regulated over the last 20 years, it is no shock.”

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