1. The Mortgage Event Learning from recent FSA activity NICK BAXTER PARTNER BAXTERS BUSINESS CONSULTANTS http://www.baxtersbc.co.uk DIRECTOR MORTGAGE PROMOTIONS http://www.mortgagepromotions.co.uk

2. BAXTERS BUSINESS CONSULTANTS

3. Aims  Learning from TCF activities and messages  Learning from the results of thematic reviews  Learning from enforcement activity  How to avoid becoming unwittingly involved in mortgage fraud.  Using the resources at the FSA

4. TCF – 2008 deadlines  “Your firm must be able to demonstrate by the end of December 2008 through its management behaviours that it consistently treats its customers fairly.”  What are appropriate management behaviours?

5. Mortgage roadmap - thematic review  Affordability  Self certification  Training and competence  Senior Management responsibilities

6. Avoiding fraud!  Obtaining a money transfer by deception  Money laundering  Paul Sims, Daily Mail 4 August 2007 –“Brokers’ urge buyers to lie for home loans” – Judge same case: “'There is evidence you appear to have been steered towards giving misleading information.”

7. Avoiding fraud!  FSA – Increasing intelligence received from lenders by streamlining reporting processes and providing more clarity on the information needed – targeted visits to 200 mortgage intermediaries to assess their systems and controls. – banned 17 individuals, including a £129,000 fine, for their part in mortgage fraud  Where next professional negligence claims?

8.  Failure to undertake plausibility checks on income information supplied by customers. In cases where the customer over- estimates or exaggerates their income, there is a risk the customer may not be able to afford the mortgage payments, particularly where there are arrears or other credit problems. The firm may also be complicit in the submission of potentially fraudulent information to mortgage lenders.  Failure to cross-reference details held on file, for example where the employment information supplied by the applicant does not agree with the employer's reference.  Blanking out salary details on the pay slip for a self certification case, where the document was being used as proof of employment but not income. FSA bad practices

9. The Mortgage Event Learning from recent FSA activity NICK BAXTER PARTNER BAXTERS BUSINESS CONSULTANTS http://www.baxtersbc.co.uk DIRECTOR MORTGAGE PROMOTIONS http://www.mortgagepromotions.co.uk