The Financial Services Authority has fined a mortgage broker £31,500 and banned another for mortgage fraud practices which allowed incorrect and misleading mortgage applications to be made to banks and building societies.

Ronald Winton from Mortgage Healthcare Limited in Dundee has been fined £31,500, and will not be able to hold a senior position in a financial services firm for two years.  

The regulator found mortgage brokers and financial advisers at the firm were able to submit false and misleading mortgage applications. They identified 14 out of 19 cases in which it appears that customers submitted mortgage applications to lenders which contained false or misleading information about their incomes, leading to mortgage fraud.

The FSA he was concerned that 65 per cent of the firm’s business was interest only mortgages. Ronald Winton, stated he had no control over this. He also admitted that mortgage advisers were still failing to check the ability of customers’ affordability with repayment strategies for interest-only mortgages. 

He ran a separate business from different premises, and delegated day-to-day responsibility of Mortgage Healthcare Limited to two non-approved mortgage brokers. A previous FSA visit to the firm identified concerns at the level of interest only and self cert mortgages. After a further visit, they found no evidence that he had taken any action to remedy the problems. 

The regulator found issues with the suitability of advice given to customers and inadequate complaints handling procedures. Mortgage Healthcare Limited has had its permissions removed and has ceased trading. 

FSA director of enforcement and financial crime Margaret Cole says:

“FSA rules ensure that financial services firms operate safely, protecting both their customers and the industry itself. Anyone found flouting those rules will face stiff penalties”

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