(1888PressRelease)
December 01, 2007 - London (Ask4loan) : The Financial Services Authority (FSA) has warned those mortgage brokers who sell self-certification mortgages. The financial watchdog threatened severe action against dishonest mortgage brokers. It is said that even good brokers were being undermined by the 'negligence or wilful non-compliance' of others.
Commenting on the unfair practices adopted by some brokers, Stephen Bland of the FSA said: "We found some firms willing to offer mortgages they know to be unaffordable and to accept self-cert business even where they had concerns that the financial information provided by the customer was implausible. These practices are completely inconsistent with treating customers fairly - hence the large number of enforcement referrals and other regulatory actions."
The FSA has been regulating the sale of mortgages since 2004. Self-certification mortgages have been its one of the main areas of concern. These mortgages allow people to produce their own paperwork to show that they can manage to repay the loan they want to borrow. The FSA has taken enforcement action by ordering many penalising many broking firms and ordering close down also. This year FSA staged four reviews of mortgage brokers, referred seven firms for investigation and asked 65 to check their work.
The FSA says that failing to ask for evidence of income is exposing lenders to the possibility of fraud. The Council of Mortgage Lenders backed the action against brokers who are failing to comply. It defended itself by saying that the FSA's views relate to brokers and not the lenders.
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