Action taken against sub-prime mortgages
The Financial Services Authority
are looking to take action against 5 companies which distribute
sub-prime mortgage deals.
Looking at recent figures, many mortgage
lenders and brokers
were offering loans to borrowers who do not meet the criteria
for such a loan.
Clive Briault from FSA commented; "Consumers in the sub-prime
market are vulnerable people who may have high debts or a bad
"We will not hesitate to take action where we find bad practice," he
warned. The FSA group has been watching brokers and lenders since
Regulators are looking to ban individuals and set large fines
eliminating them from ever selling a mortgage
Ray Boulger of Charcol said, "As the FSA highlighted in the report,
inflating income is a criminal offence and while there is no
proof, one suspects that this may well have been the case in
some, if not many instances."
Many firms did not check whether or not the data on the mortgage application forms which were processed were true. This was causing
applicants to input higher incomes leading them to take on loans
which they cannot make monthly repayments to.
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