FSA finds fault with mortgage brokers

News Category: Legal

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A series of reviews by the Financial Services Authority (FSA) have found fault with the UK mortgage market, with some brokers still operating "well below standard".

The reviews looked at issues including training and competence standards, the effectiveness of senior management controls, and affordability across brokers in the prime and sub-prime markets.

Seven firms were referred to enforcement as a result, with more being considered for referral. Also, other mortgage brokers have been made to undertake past business reviews, and some have ceased trading until they can put their houses in order.

"During the reviews we saw a number of good brokers who are meeting the required standards and they are being undermined by the negligence or wilful non-compliance of others," said FST retail intermediary sector leader Stephen Bland.

"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."

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