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Mortgage broker banned and fined £106k

A mortgage broker has been banned and fined £106,499 for inflating incomes and falsifying employment details on mortgage applications.

The fine against Gillingham-based broker Michael Lewis, trading as Lewis Partnership, is made up of a £100,000 punitive element and a disgorgement of commission and fees of £6,499.

The FSA found that Lewis knowingly submitted mortgage applications in his own name and in clients’ names containing false and misleading information.

It found that Lewis submitted applications with inflated incomes, provided false employment details for his clients, and acquired, certified and provided a falsified payslip to a lender for a client in order to provide evidence of an inflated income.

In a mortgage application submitted in his name in April 2007 Lewis declared a net profit for the year ending October 2006 of £88,335, but declared in his retail mediation activities return a gross profit for the same period of £57,344.

In mortgage applications for one client between 2006 and 2008 Lewis stated that he had a gross basic salary of £22,000 in March 2006, that the same client earned £145,000 in April 2006, and that he earned £145,000 in August 2008.

According to HM Revenue & Customs records, the client actually earned £22,754 for 2005/6, £25,314 for 2006/7, and £13,242 for 2007/8.

FSA head of retail enforcement Tom Spender says: “While the vast majority of brokers are honest and diligent, Lewis knowingly broke our rules. Lewis is the 107th individual that we have prohibited from working in the industry through our investigations into misconduct by mortgage brokers.  We have said before that flagrant breaches of our rules will result in severe penalties, and this significant penalty of £106,499 is further evidence of our approach.

“Many of our mortgage fraud cases have started out as referrals via the Information from Lenders scheme, but we are keen for more intermediaries to report wrongdoing to us as well. There is a mechanism in place for this, similar to the IFL scheme, but to date there have been very few reports from the broker community.”

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  1. Thank you Mr Spender for stating that ‘the vast majority of brokers are honest and diligent’.
    This is a refreshing change coming as it does from an employee of the FSA.

    Asking intermediaries to report wrongdoing is all very well but in my personal experience this does not work in practice. I have reported three separate individuals, one independent broker, one bank salesman and one ‘bankassurance’ manager.
    Despite giving almost chapter and verse nothing was ever done about any of them.

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