News
Unauthorised mortgage broker among four ordered to pay £4m by High Court
The Financial Conduct Authority (FCA) has secured an order of £4m against an unauthorised mortgage broker firm and its associates who the regulator said, “exploited vulnerable consumers”.
The judgment found that the defendants arranged high interest, “unaffordable” bridging loans for people who were about to be evicted from their homes. In some cases, the defendants bought homes from the people facing repossession for less than valued, then rented the properties back to them.
It was found that the firm London Property Investments (LPI) arranged mortgages while NPI Holdings Limited (NPI) bought properties and rented them back to the sellers, both without regulatory authorisation. Daniel Stevens, the director of LPI and NPI, and his father, Tony Stevens, were also found liable.
In his judgment, Mr Justice Fancourt described these breaches as “serious contraventions, conducted over an extended period, involving high levels of culpability including deception of the consumers and the lenders, and which took advantage of the consumers’ vulnerability.”
The four defendants have been ordered to pay around £4m to the FCA.
The regulator said this was an “important next step” in the case and it needed to recover funds before any compensation could be paid to those affected.
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LPI is required to remove restrictions registered against the titles of four properties. These restrictions were used to force individuals to pay “exorbitant fees” to LPI, the FCA said.
It was found that if these fees were not paid, then the individual could not sell or remortgage their property. In some cases, this resulted in some people being stuck on high interest bridging loans.
‘Preyed on vulnerable people’
Steve Smart, executive director of enforcement and market oversight at the FCA, said: “These sham brokers preyed on vulnerable people who were struggling financially and trapped them with exorbitant fees.
“The defendants used a smokescreen of deception which cost consumers and lenders dearly. This was a complex case, but the ruling shows that these were serious breaches of our rules.
“It is only right that we can now pursue LPI, NPI, Daniel and Tony Stevens to compensate for the losses they caused the victims.”