Mortgage broker fined £100,000 for fraud
A mortgage broker has been fined £100,000 ($191,197) and banned in the latest of the City regulator’s efforts to crack down on fraud in the sector.
Omotayo Fawole, who operated in south-east London, was the second broker to be fined by the Financial Services Authority this year.
The fine was imposed as the FSA is toughening up its oversight of the mortgage broking industry. Last month it called on more lenders to help stamp out fraud by reporting suspicious applications.
Margaret Cole, the regulator’s director of enforcement, said on Monday that the size of the fine was aimed at deterring other fraudsters. “We will continue to make examples of people who commit mortgage fraud until behaviour changes,” she said. “Perpetrators of fraud will find themselves facing bans and significant fines, as well as action by the police or other agencies aimed at confiscation of assets.”
The watchdog has already banned 17 brokers in addition to Mr Fawole this year, compared with a total of six in the whole of last year and just two the year before that.
It is also considering whether to bring the industry under the same official checks as investment advisers who work with more complex long-term products such as pensions. Mortgage brokers do not need to be approved, though Mr Fawole was, because he managed the firm.
The FSA found two instances in which Mr Fawole had considerably overstated earnings and profits in mortgage applications, one of which related to him and the other to an employee.
The FSA is developing a mortgage fraud database to look at patterns of mortgage fraud and to help it better target its investigations. It has already streamlined its investigations into frauds, which now take between three and six months to complete.
Investigations tend to begin by comparing tax filings to applications. Much of the evidence against Mr Fawole came from his tax filings, which showed markedly lower income than his mortgage applications.
Last month, the regulator banned Sadia Nasir, a broker operating in Essex, and fined her £100,000 for submitting false applications and falsifying documents such as payslips and financial statements.
In four cases, she used her own banking details on applications for clients. The FSA also added a further £29,000 demand to claw back illicit profits.
The tough stance fits with the regulator’s aim of stepping up its enforcement activities. Ms Cole, a former litigation partner at a top City law firm, has said she intends to develop a steady stream of cases.
