The regulator has banned Peter and James Dean, directors of UK Finance House, and fined Peter Dean £17,500.
Peter Dean, based in the Poole office, failed to take reasonable steps to prevent false information being provided to mortgage lenders and from the company being used to further financial crime.
He also did not realise that introducers were acting on behalf of UKFH without its authority or permission.
He also failed to realise that James Dean, based in the Bournemouth office, was signing off mortgage applications as his own work when they were actually prepared by a third party.
The FSA also ruled that Peter Dean had engaged in unauthorised mortgage business by providing a mortgage to a client through an unauthorised company where he was also a director.
James Dean was found to have submitted a personal mortgage application with false earnings details.
He also signed off applications with false supporting documents.
The FSA has cancelled the permission of UKFH.
Georgina Philippou, head of retail enforcement at the FSA, says: “The actions of Peter and James Dean posed a serious risk to lenders and consumers.
“As part of our crackdown on financial crime in the mortgage market we have banned a number of mortgage brokers and others in the last year and we will continue to make examples of people, including by bans and fines, who either commit mortgage fraud or fail to prevent their firm from being used to further financial crime.”