The Financial Services Authority (FSA) has fined a County Down mortgage broker for failures which led to fraudulent mortgage applications being submitted to lenders.

Newtownards-based Case Funding Centre (CFC) has been ordered to pay £35,000, with James Ian Shanks, an ex-partner at CFC, banned for recklessly submitting false information to lenders.

An FSA Investigation found that at least 16 fraudulent applications were submitted, with a revelation that CFC did not have adequate systems and controls in place to counter the risk of customers and staff submitting mortgage applications based on false income and employment information.

Furthermore, advisers did little more than superficial checks on mortgage applicants’ income and employment details.
The FSA said these failings, combined with CFC’s “historically weak recruitment process”, led them to conclude that the firm had exposed itself to the risk of being used to facilitate financial crime.

In addition, Shanks was shown to have submitted mortgage applications from CFC’s advisers containing income information that he failed to verify against the firm’s records, despite being aware that such a check was possible.
CFC is part of the Milecross Group which was founded in 1997. The company’s website says they specialise in “adverse mortgages”, also known as sub-prime mortgages.

Margaret Cole, director of the FSA’s enforcement and financial crime division, said they expected all authorised firms to take the necessary steps to stop their businesses from being used to commit crime.

“We also expect high standards from individuals who are approved by the FSA to perform significant influence functions. Both CFC and Shanks fell short of the standards we expect and they are being punished for their failings,” she added.

Because CFC and Shanks co-operated fully with the FSA during the investigation and agreed to settle at an early stage a 30 percent discount has been applied to the proposed penalty of £50,000.