A mortgage firm in Scotland has been fined £11,900 by the Financial Services Authority (FSA) because they failed to supervise one of their mortgage advisors adequately.
The mortgage company, Mortgage Master (Glasgow) Limited, is based in Kilmarnock. The FSA stated that their failure to supervise the mortgage advisor properly allowed him to submit false and misleading information on mortgage application forms.
As a result, the mortgage advisor in question, Ian Sanderson, has now been banned and can no longer work as a mortgage advisor.
Now, Mortgage Master must go through all of Sanderson’s mortgage files to check the mortgage applications and where false information is found, they will have to inform all clients and lenders of the breach.
As part of CeMAP training, potential mortgage advisors are taught of the importance of compliance with FSA regulation. If mortgage advisors are found to be in serious breach, such as in this case, the FSA are able to ban the mortgage advisor or even the mortgage firm from operating in the UK.
Jonathan Phelan, head of retail enforcement at the FSA, said:
“Mortgage Master’s systems and control and its supervision of Mr Sanderson were seriously below standard. It is important that firms’ senior management take appropriate steps to prevent their advisers from using their firm to commit financial crime. Our actions in this case show we are serious about intensifying our crackdown on mortgage fraud. Firms and their managers will increasingly find themselves at risk of bans and heavier fines if they fail to take the necessary steps to prevent their firms being used for financial crime.”
Actions taken by Mortgage Master were also taken into account and it has co-operated with the FSA’s investigation, and taken advice from its third party compliance consultant. Mortgage Master has also improved their systems to ensure future compliance.
By settling at an early stage, they qualified for a 30% reduction in the fine, otherwise they would have had to pay a £17,000 fine.
After delegates have achieved their CeMAP qualification, their next step is to get their Competent Advisor Status, which is usually done within a firm, such as Mortgage Master. That firm is responsible for the actions of the mortgage advisor.