Recently released figures have shown that over the past three years there has been an increase in the number of fraudulent mortgage lenders that in operating in the UK. An increasing number of turned to fraud over the past year since the global credit crunch made it more difficult for consumers to get finance, hence making it more difficult for brokers to earn their commission.
One industry official said: ‘The FSA is having a purge on mortgage intermediaries right now it is focusing very intensely on stamping down on poor standards within the mortgage industry. A lot of the sins are hidden in a rising market but when things start to go wrong then consumers are far more likely to complain.’
He continued: ‘The mortgage intermediary market is very splintered and whilst I generally think that standards are not bad, at the bottom end of the market, there quite a lot of rogues, especially within the subprime sector.’ Another official said: ‘Over the next two to three years, a steady flow of mortgage brokers will continue to be fined, closed down and censured by the FSA.’
An official from the Association of Mortgage Intermediaries (AMI), said: ‘It is unfortunate but true. The FSA has only been regulating the industry for a short while and what the mortgage intermediary market is experiencing is a bedding down period – it is getting used to the new regulations. There are some 20,000 brokers in the UK and the level being fined by the FSA, is a very small percentage. But having said that if brokers are acting fraudulently, then there is no question, the FSA should take action.’
