FCA obtains High Court judgment against unauthorised mortgage brokers

Nov 16, 2022 5:33:07 PM

What has happened?

In November 2022, the FCA announced that it had obtained a High Court judgment (available at https://caselaw.nationalarchives.gov.uk/ewhc/ch/2022/2862) against London Property Investments (U.K) Limited (LPI), NPI Holdings Limited, their director Daniel Stevens and his father Tony Stevens for arranging mortgages without FCA authorisation and exploiting vulnerable customers in financial difficulty.

What are the key points of the judgment?

The judgment found that the defendants had arranged high-interest, unaffordable bridging loans for consumers about to be evicted from their homes. In some cases, the defendants had bought homes for less than their value from owners, who were facing repossession, and had then rented the properties back to these consumers. The defendants were not authorised to arrange mortgage contracts or sale and rent back agreements and the judge described these breaches as 'exploitative of vulnerable individual consumers' and found that they were undertaken 'to obtain significant personal gain'.

LPI will now be required to remove around 22 restrictions registered against individuals’ properties. These restrictions were used by the defendants to force the individuals to pay exorbitant fees to LPI; if these were not paid, then the individual could not sell or re-mortgage their property. In some cases, this trapped individuals into high-interest bridging loans.

In July 2020, the FCA had obtained an interim injunction and a freezing order to stop these activities and to freeze residential properties and other assets owned by Tony and Daniel Stevens and the two companies.

A later trial will consider remedies including compensation for affected individuals. This trial will also hear evidence in respect of up to 88 further potentially affected individuals who were not part of the FCA’s first claim.

How can we help you?

If you’d like to know more about how we can help you with your mortgage lending or vulnerable customers arrangements, or any other regulatory compliance issues, our specialist team is here to help.

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