Sheila Nicolls, head of conduct policy at the regulator, told the Mortgage Business Expo 2011, that such attempts merely hampered consumer protection and could amount to fraud.
She urged brokers to be sure that their “actions are consistent with the standards expected of you”.
She said: “One repeated concern is that the current pressure might cause some to create solutions that might best be called ‘imaginative’.
“To give an example, bridging loans have clear consumer benefits in unlocking property chains. But they are a far less likely answer for borrowers in payment difficulties and may simply put off the inevitable without any clear evidence that this is in the consumer’s best interest.”
In addition, Nicoll warned brokers against using buy to let to obtain a mortgage for customers unable to prove their income.
She said: “If in fact they live in the property, or intend to move in there, then it follows the application is false – and you might be helping with that fraud.”
Nicoll added: “Imaginative answers require careful thought given the significance of the consequences, if unauthorised firms have provided loans that should have been regulated, or if the loan has been mis-described.
“Be sure that your actions are consistent with the standards expected of you, being particularly conscious that the borrowers you’re trying to help may already be more vulnerable because of past payment problems or the like.”
