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      • 2008

FSA/PN/100/2008
08 September 2008

The Financial Services Authority (FSA) has censured Coventry-based mortgage broker, Mr Mohammed Habib, who traded as MAH Mortgage and Finance, for failing to ensure that his customers received suitable advice.

Mr Habib must also pay for an independent review of his past business, compensate customers if appropriate, and must stop providing regulated mortgage advice.

The FSA found various failings which exposed customers to the risk of being recommended mortgages which were unsuitable or they could not afford.

Between 31 October 2004 and 11 January 2008:

• Mr Habib failed to assess, or record that he had assessed, his customers’ ability to pay the mortgage he recommended;
• he could not provide proof that self certification mortgages he recommended were appropriate for the customer; and
• he recommended lending into retirement without assessing the customer’s ability to pay after retirement and did not record why he had made that recommendation.

Jonathan Phelan, FSA Head of Retail Enforcement, said:

"Customers need to be confident that when they seek mortgage advice they can trust the recommendations made to them. We will continue to take disciplinary action against mortgage brokers who cannot demonstrate that the products they recommend are affordable.  Where we have concerns about the quality of the mortgage advice given, we will continue to require mortgage brokers to undertake reviews of past business, often at considerable cost to them, to identify and remedy any unsuitable advice."

The FSA censured Mr Habib as he was unable to pay the proposed financial penalty of £22,500. As part of the disciplinary action Mr Habib must also:

• have an independent compliance consultant carry out a past review of his business to assess whether there has been any customer detriment and provide redress where appropriate; and
• withdraw all of his permissions, which will result in him no longer being able to conduct any regulated mortgage business.

Notes for editors

1. The Final Notice for Mr Mohammed Habib can be found on the FSA website.
2. Mr Habib is a sole trader operating as a mortgage broker in Coventry.
3. These mortgage brokers’ failings were found during a series of visits by the FSA’s Small Firms and Contact Division which focused in particular on self certification mortgages and affordability of mortgage advice, details of which were published in November 2007. FSA Press Notice 007/120 describes the findings.
4. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
5. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.