Mortgage broker stripped of permissions

A mortgage adviser has been stripped of all his regulated permissions by the FSA.

Christopher Riches, trading as Fairway Mortgages, of Hornchurch, Essex, had continued to advise clients despite not being regulated, and lied about having professional indemnity insurance.

The FSA says that Riches was granted authorisation by the FSA to conduct regulated home finance business in October 2004, and in January 2005 was also permitted to conduct insurance mediation business. However, in January 2010, he was required to cease to conduct regulated business.

Nevertheless, he had completed 69 mortgage transactions since then.

The regulator also found that Riches had submitted false and misleading information to it, including three Regulated Mediation Activities Returns in which he stated he had PI insurance, when in fact he did not.

In a supervisory notice the FSA said: “Mr Riches has conducted regulated activities despite not having the permission to do so over a prolonged period of time, and therefore has failed to conduct his business with honesty and integrity, or in compliance with proper standards, and he therefore no longer satisfies the FSA that he is a fit and proper person to conduct regulated activities.

“He has repeatedly provided false and misleading information to the FSA, and as such Mr Riches presents a significant risk to consumers.”

Riches has the right to refer the matter to the Upper Tribunal.

NEWS source: Introducer Today

Innovation and service is the key, says CML head

It is time for the £1.2 trillion UK mortgage lending industry to pull together, focus on quality, and innovate for the good of customers and the long-term health of the UK housing market, according to Council of Mortgage Lenders chairman Martijn Van der Heijden.

 

Speaking on Friday to an audience of over 600 at the CML annual lunch, he said: “I think we have to get more honest, more transparent, more intelligible, to our customers. We need to be clear about what we provide and how we provide it. 

 

“More importantly, we need to make a true cultural shift from a sales culture to a service culture.

 

“Somehow, after deregulation but before the credit crunch, mortgage lending sleepwalked into becoming a commoditised sales business rather than a true customer relationship business. It took the credit crunch to wake everyone up, and now we need to make sure we stay awake.

 

“However, increasing confidence should not simply mean defaulting to the ultra-conservative.

 

“What we shouldn’t do is build in a safety buffer on capital, a safety buffer on conduct, a safety buffer on market differentiation, and end up with a small market of homogenous offerings. There may be pressure from regulators to do so, but to throw away our diverse market place would be an eternal shame and won’t help society.”

 

However, Van der Heijden suggested that the industry needs to support regulators more actively when scrutiny is legitimate.

 

He said: “We should be braver about standing up for doing the right thing, and doing business in the right way. What we shouldn’t do is turn a blind eye. While we should defend our turf against regulatory excess, we should equally support efforts to identify areas where there are attempts to circumvent rules and allow poor lending to slip through the net.”

New Source: Intorducer Today

 

Emphasising the importance of innovation, he said: “Too often in the past, innovation was a euphemism for higher risk. That kind of innovation is not what I mean at all. What I mean by innovation is making it simpler for the customer, providing solutions where there aren’t any. 

 

“Creativity and innovation can be a challenge for lending businesses operating in a cost-controlled environment.

 

“But necessity is the mother of invention, and we are the people who have to do this. Innovation won’t invent itself.”

UK workers face desperate times as cost of living soars

Rising energy prices are savagely reducing the quality of life for some of the poorest members of our society, the UNISON union has warned.

The situation is so bad for some public services workers that they are only putting the heating on when the temperature drops below freezing, or are going to bed early to keep warm.

As well as forcing workers to make significant reductions to their outgoings, such as selling a family car - as reported by one UNISON member - low-paid workers are having to forego even small luxuries, such as a trip to the cinema, so crippling their energy bills have become.

Another member, applying to the union for a winter fuel grant, said that they could only afford to put the heating on at the weekends, so that the house was warm for when their grandchildren came to visit.

The shocking impact that exorbitant energy costs are having has been highlighted by There for You: supporting UNISON members when life gets tough - the charity arm of UNISON, the UK's largest union.

There for You, which provides grants to UNISON members who are experiencing financial difficulties ranging from struggling with mortgage repayments, to small loans to buy clothing such as school uniforms, paid out more than £750,000 in grants in 2011 - and increase of more than 11% since 2010.

UNISON general secretary Dave Prentis said: "The pay freeze is really hurting many public service workers and their families. It is a disgrace that working people have to turn to welfare grants just to buy basics like clothing - for which we've seen a more-than-500% increase - and to pay their household bills. The soaring cost of energy is pushing many family budgets over the edge.

"The sun may be shining now, but winter will be here before we know it, and it is a scandal that exorbitant energy prices are having such a massive impact on the quality of life of some of the poorest workers in our society. The fact that they are having to take measures as extreme as only putting the heating on when the temperature hits freezing shows just how bad the situation has become.

"Low-paid public sector workers are the backbone of our society, and the Government should be ashamed that these people are having to make such enormous sacrifices and struggling just to keep warm. UNISON questions what the role of the utilities watchdogs is when the poorest in our society cannot heat their homes, while utilities companies continue to rake in massive profits for their shareholders. Heat is a basic human need, not a luxury to be rationed, and we urge the Government to act now to turn this situation around before it ends in tragedy."


Source  NEWS : Investor Today

Bridging lender sued over mortgage fraud case

Bridging lender West One Loans has declined to comment after being drawn into a legal battle involving a property fraud.

The lender is being sued after one of its investors lost £235,000. Nick Clarke alleges that West One Loans acted in breach of contract over a loan raised on a property in Gowan Avenue, Fulham, London.

West One Loans lent a total of £575,000 to someone claiming to be Massimo Barbini, the registered owner of the property. However, the Land Registry spotted a signature which did not match any in previous records, and uncovered the fraud.

The fraudster has apparently not been traced. Clarke says West One Loans owed him a ‘duty of care' and that it should have obtained valid security for the loan and verified the real identity and address of the borrower.

Clarke has hired top law firm Mishcon de Reya, and is seeking the return of the £235,000 cash plus interest and costs.

The case is due in the High Court on July 6.

The Office of Fair Trading (OFT) explained it had no remit in this area.

“We license providers of bridging loans and we would be interested in the contractual relationship between the lender and the consumer, but this is a B2B dispute,” it said.

Mark Abrahams, CEO of West One Loans, said: “Sadly, we cannot comment on this investor matter as it’s subject to ongoing legal proceedings. Having said that, I would like to take this opportunity to highlight the robust best-practice measures West One Loans has in place to combat fraud.”

Gowan Avenue, Fulham, achieved notoriety when the TV presenter Jill Dando, who had a home there, was killed on the doorstep.

NEWS Source : Letest Property News

FSA's ban on dishonest broker upheld

The FSA has banned self-appointed insurance broking director Derek Wright from performing any FSA-regulated functions.

Wright had previously worked as a director in the regulated insurance market, and in 2001 was disciplined by the Lloyd’s Disciplinary Tribunal. Wright thought he was not being fairly remunerated, and dishonestly diverted premiums and client money from his firm for his own use.

As a result he had been permanently banned from all Lloyd’s premises and was permanently suspended from conducting any insurance business at the firm.

From 1997, Wright ran Moorgate Insurance Agencies, a small insurance broker in Romford, Essex, which was authorised by the FSA from 2004 to 2008.

During this time Wright acted as a director of Moorgate, despite never having been approved by the FSA to fulfil the regulated functions associated with the role.

The only person within Moorgate who was approved to do so was Wright’s wife Mary, but she had little to do with the firm on a day-to-day basis.

Wright was responsible for submitting the firm’s Retail Mediation Activities Returns to the FSA, but these indicated that the firm’s capital resources were consistently below the level required by FSA rules, and also contained inaccuracies.

In February 2007, Wright informed the FSA that the firm’s capital resources deficit would be rectified by a further share issue. But while a copy of a Companies House form was submitted to the FSA purporting to show an allocation of shares to Wright, the annual returns submitted by the firm to Companies House later that year showed no new shareholdings.

The following year, the FSA asked Wright to prove that Moorgate’s creditors had been paid, and that debtors’ money had been collected. His response was that another broking firm had taken over responsibility for collection and payment of premiums, a change which had occurred without the FSA’s knowledge or consent.

Following the FSA’s original Decision Notice in March last year, Wright referred the matter to the Upper Tribunal.

In its response the Tribunal found his actions working at Moorgate suggested he had learned little from his experience at Lloyd’s.

The Tribunal found he had misled the FSA over who was carrying out functions at the firm, and that in addition to dishonesty he had a cavalier attitude to regulatory compliance.

Tom Spender, the FSA’s head of retail enforcement, said: “This case graphically illustrates the dishonesty and lack of integrity that some brokers will exercise if it suits their purposes. Wright dishonestly sought to hide his past and rehabilitate himself by posing as someone authorised to carry out regulated functions for Moorgate, when he was not.

“The FSA will continue to take strong action whenever we see this type of conduct.”

View news source : http://www.introducertoday.co.uk/news_features/fsas-ban-on-dishonest-broker-upheld

Bridging loan industry now worth £1bn

The value of the bridging loan industry has broken the £1bn barrier for the first time, driven by buy-to-let investors unable to get funding elsewhere.

West One’s latest quarterly bridging index found that gross lending in the 12 months from March 2011 to March 2012 rose sharply to reach £1.1bn, 21 % higher than in the 12-month period from January 2011 to January 2012.

West One, itself a bridging lender, says the increase is being driven by residential property investors.

With funding costs soaring on the high street, and banks and building societies scaling back their lending, it says that more investors have turned to bridging loans to fund their projects. Bridging lenders are plugging the funding gap left by high-street lenders.

Gross lending in the first quarter of 2012 was £382m, 95% higher than in the first quarter of 2011, and 30% higher than the previous quarter. If the pace of growth continues on its current trajectory, gross lending in 2012 will hit £1.5bn, an increase of 68% from 2011.

The number of loans advanced in Q1 2012 was 74% higher than during the same period last year.

The average loan size rose sharply from £342,000 in the first quarter of 2011 to £412,000 in Q1 2012, an increase of over 20%. This, says West One,  reflects the bigger projects being tackled by property investors.

Duncan Kreeger, chairman of West One Loans, said: “A big funding gap has been created by the problems high street lenders are having with increasing funding costs, increasing capital requirements and heavy exposure to toxic assets.

“As a result, the high street simply can’t cater for the high demand from property investors for residential loans.

“Thankfully for property investors, bridging lenders are stepping in to fill the funding gap.”

He added: “But it’s not just investors who can’t get finance on the high street that use bridging loans. We’ve seen plenty of evidence of investors using bridging loans even when they can access a buy-to-let mortgage on the high street.

“This may be just the start of a more pronounced shift in the way property investors choose to fund their projects. The figures back up that view: with gross lending set to reach over £1.5bn by the end of this year, the bridging is growing at a rapid pace. Property investors see bridging loans as an increasingly legitimate option.”

View news source : http://www.introducertoday.co.uk/news_features/bridging-loan-industry-now-worth-E2A31bn

FTBs' scramble to save 1% Stamp Duty puts their prices up

First-time buyers paid 2.8% more for their homes in March as they tried to make savings of 1% in Stamp Duty.

The Office for National Statistics said that first-time buyers were unique in paying higher prices this March than March of the previous year.

For owner occupiers moving homes, prices decreased by 1.6% over the same period.

The ONS index, one of the Government’s two official house price indices which sits alongside the very different Land Registry survey, said that overall, UK house prices in March this year were 0.4% lower than a year ago.

It said house prices had barely changed since the beginning of 2011, other than in Northern Ireland where there have been big price falls of 10.7%.

Also noticeable in the index is that the price of new homes has shot up by 6.9% in the 12 months to March, while London house prices have slipped by 0.6%. Although a small fall, it is the first move downwards for London property prices since October 2009.

The ONS puts the average house price in the UK during March at £225,283 – considerably above the Land Registry’s price of £160,372 for the same month.

Meanwhile, the NAEA said there were signs of ‘another slowdown’ in the housing market in April.

It said that listings increased per branch by just one, from an average of 61 in March to 62 in April, with an average of seven sales per branch during the month – the same as in March.

Wendy Evans-Scott, NAEA president, said: “Despite sales figures remaining stable, there is little sign of green shoots of growth in the levels of property supply and demand.

“Growth is being held back by continued restrictive lending policies from the major banks and lack of an adequate mechanism to support the first-time buyer market, a situation which will only get worse if mortgage rates rise as predicted.”

* The number of housing transactions in April was down markedly in April.

A total of 72,000 homes across the UK were sold, according to HMRC – down from 88,000 in April, although up on the 70,000 sold in April last year, when the Royal Wedding proved a distraction.

This April’s figure equates to 2,400 sold a day, compared with the long-term average of 3,383, said housing analyst Henry Pryor.

He said properties on the market have just an 8% chance of being sold in the next month, and a 34% chance of being sold within the next year.

View news source : IntroducerToday News