Four Brokers No Longer Eligible in Financial Services After Fraudulent Mortgage Practices
Financial regulators in UK have banned four mortgage brokers from working in financial services after finding out that the intermediaries were engaged in fraudulent mortgage practices.
The Financial Services Authority (FSA) additionally imposed financial penalties upon the mortgage brokers amounting to £450,000 overall for deliberately “using misleading and inaccurate information to secure mortgages.”
The FSA’s decision was released a day after it previously fined Norwich and Peterborough Building Society (N&P) £1.4 million for giving its customers unsuitable advice in relation to the sale of Keydata life settlement products.
N&P has agreed to pay the fines on an ex gratia basis which will be used to compensate the affected customers with their initial investments plus interest.
In four final notices published by the FSA yesterday, Joseph Chinedu Nwosu, founder, sole shareholder and sole director of Gemmini Mortgages Ltd, was fined £200,000 for 14 attempts of fraudulent mortgage practices over 26 months. Subsequently, the FSA has cancelled Gemmini’s permission to conduct regulated activities.
According to the FSA’s notice for Nwosu, he obtained five regulated residential mortgages and one unregulated buy-to-let mortgage using inaccurate and misleading personal information.
Alaba Adewale Adebajo, director of Whitehouse Estate Agents and Financial Services Ltd, was also fined £150,000 for committing five fraudulent mortgage practices and for failing to keep records of clients.
Adebajo, one of the two directors of Whitehouse, owned 100% of the share capital. Subsequently, Whitehouse’s permission to carry on regulated activities has been cancelled.
In addition, Alistair Curren of B-Assured Financial (B-Assured) was fined £100,000 for submitting fraudulent mortgage applications and for failing to declare income to HMRC. The FSA added that Curren failed to address the risks to customers posed by him as required by the regulator.
The FSA similarly banned Jageet Kaur, a mortgage advisor employed by Gemmini, from working in financial services for having knowingly submitted five false and misleading personal mortgage applications.
The decision was upheld by the Upper Tribunal (Tax and Chancery Chamber) which “recognised the risk posed by mortgage brokers involved in mortgage fraud.”
“The submission to lending institutions of dishonest mortgage applications is, in our view, a very serious matter,” the Upper Tribunal said in a published judgement.
“The Tribunal’s judgment on Curren sends an important message to others in the industry about how seriously this sort of behaviour will be taken,” said Tracey McDermott, FSA acting director of enforcement and financial crime.
All mortgage brokers have been banned from working in financial services.