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FSA bans mortgage broker for incompetence

The Financial Services Authority has banned Walthamstow mortgage broker Kevin Byrne for lacking the integrity and competence to prevent his business being targeted by mortgage fraudsters.  

An investigation by the FSA revealed Byrne accepted mortgage referrals from an introducer but failed to undertake due diligence or any basic checks on client information supplied by the introducer.

As a result, he submitted seven mortgage applications containing false and misleading information; in fact at least one of the customers did not exist.

Byrne was also found to have certified a number of supporting documents, despite never having seen the originals.  As a result, mortgage applications were submitted using erroneous information, such as:

  • A bank statement for one applicant that contained differing sort codes and account numbers on different pages;
  • Two applications made using false passports; and
  • Payslips supposedly from different employers yet using identical formatting.

When questioned by the FSA, Byrne confessed that no checks were in place at Forest Financial to help reduce the risk of his business being used to commit mortgage fraud.  

Margaret Cole, director of enforcement and financial crime at the FSA, says: “Byrne acted recklessly by accepting business from introducers without undertaking any due diligence.

“This made him an easy target for the introducer to obtain mortgage advances from lenders on a fraudulent basis, which could have been prevented if Forest Financial had put in place basic financial crime checks.

“Byrne is paying a heavy but necessary price.  This prohibition serves as another warning to mortgage brokers who accept business from introducers in suspicious circumstances without doing the proper checks.”

With Byrne now prohibited and Forest Financial without sufficient resources to operate, the FSA has cancelled the permission of the firm.

Byrne was the only adviser at Forest Financial, which was authorised by the FSA to arrange mortgage contracts on behalf of consumers.  


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  • Qamar Hussain 8th March 2010 at 11:02 am

    As long as brokers keep paying this circus clown regime it fees, this circus clown regime will continue being the most hated circus clown on the planet.

    Who needs the FSA anyway in any area of our lives?

  • Dave Clarke 16th February 2010 at 10:23 am

    I know the easy answer is to blame the FSA here and rant on about how bad a job they are doing. But I’m sorry- this adviser accepted documents which he should have spotted as being fraudulent or inaccurate at best (different account numbers on the statement?!?!).

    Yes, the lender was enjoying the business and yes the lender might have started this whole investigation when the mortgages went belly-up (was this the case) but either way, Forest clearly sat back and enjoyed the proc fees without taking even basic steps to protect themselves.

    ID&V and income verification need not be difficult!!!

  • Anonymous 15th February 2010 at 11:24 pm

    The broker is obviously totally in the wrong however if the errors on the mortgage pack were that obvious why did the lender not spot them ? because they did not want to at the time but it suits now? dont suppose the lender will be shut down for not having proper checks or employing incompetent underwriters !!

  • Charles Bunbury 15th February 2010 at 6:31 pm

    Who out there can defend this statement or say it’s not incompetence on part of the FSA. Convertible term being a useful option for the public the restriction of this option can and does work to the detriment of customers TCF. To claim that one needs to authorise to give investment advice as an IFA to give to client is incompetence. The right to go back to their protection provider when health deteriorates is benefit which should the placed by all, hence the reason why pure term is the protection of the day and placed by one and all, is this not incompetence or regulation gone too far, I must missing a few screws, please let me have your views along with who will deal with the FSA incompetence when it come to the public who interest the are defending

  • Charles Bunbury 15th February 2010 at 6:24 pm

    I do of course see your point about convertible term being a useful option for the public and that restriction of options can work to the detriment of customers. You can write to Richard Fox about this. He heads up our engagement with the mortgage sector. His address is as follows:

  • Bobby Welsh 15th February 2010 at 4:42 pm

    Stupid, just stupid… more interesting in chasing money quickly than doing a proper moral and legal job….

  • Frank Jurga 15th February 2010 at 4:41 pm

    I can assure you that there is no mortgage adviser still trading out there that does not give advice and do their admin in a 100% compliant manner. All of this FSA sweep up stuff is on old files and is shutting the stable door after many horses have bolted. I reckon virtually all advisers that have been done by the FSA on their own mortgages is as a result of the lenders investigating the arrears or repossession of that adviser.

  • graham flint 15th February 2010 at 3:33 pm

    i wonder how many brokers simply certify faxed or scanned copies of documents. let this be a lesson to everyone

  • graham flint 15th February 2010 at 3:33 pm

    i wonder how many brokers simply certify faxed or scanned copies of documents. let this be a lesson to everyone