FSA fines and bans Newcastle Home Loans and its directors for false information in mortgage applications
FSA/PN/107/2009
04 August 2009
The Financial Services Authority (FSA) has banned Newcastle Home Loans (NHL), a mortgage broker based in Newcastle, from carrying out regulated mortgage activities.
The FSA worked closely with Northumbria Police and the Solicitors Regulation Authority (SRA) in this investigation which involved a significant number of individuals across a range of financial, property and legal businesses in the Newcastle area.
The ban of NHL was the final part of the FSA’s action in relation to NHL and connected individuals. Earlier this year the FSA fined NHL £170,000 for submitting false information in mortgage applications and for allowing David Purdie to act as its chief executive without FSA approval. NHL failed to pay this fine. The FSA has also banned NHL’s directors Linda Patterson and Grace Darling Purdie, and fined Mrs Purdie £85,000. Other individuals involved have also been banned - David Purdie, the shadow CEO, and mortgage introducers Michael Foster and Kenneth Robinson.
NHL was used by its principals and by the mortgage introducers knowingly to submit mortgage applications to a lender which contained false information. This resulted in the lender unsuspectingly advancing sums which, in some cases, were considerably higher than the purchase price of the property.
Margaret Cole, FSA director of enforcement, said:
“The failures at NHL were serious, deliberate and occurred as a matter of routine. Its principals acted in a totally unacceptable fashion and their actions and the actions of those connected to the firm posed a serious risk to the lender and to market confidence generally.
“In the last three years we have banned 60 brokers and levied fines totalling more than £1 million in relation to mortgage fraud. We will continue to tackle mortgage fraud and perpetrators will find themselves facing bans and higher fines.”
Northumbria Police recently arrested Grace Darling Purdie, David Purdie, Linda Patterson and Michael Foster, among others. Its investigation, and that of the SRA, continues.
The FSA’s investigation found that the individuals involved were not fit and proper and should be prohibited from any further involvement in regulated activities or authorised firms. In relation to Grace Darling Purdie, the FSA also found that she failed to exercise due skill, care and diligence in managing the business of NHL and took no steps to satisfy herself that the business was being conducted in accordance with regulatory requirements.
Notes for editors
- Newcastle Home Loans Ltd was based in Gateshead in Newcastle. The Final Notices for the ban and fine, and the Final Notices for Linda Patterson, Grace Darling Purdie, David Purdie, Michael Foster and Kenneth Robinson provide the background to the case.
- 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.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.