FCA Obtains Judgement Against Unauthorised Mortgage Brokers
Summary
The FCA has obtained a judgment against London Property Investments (U.K.) Limited (LPI) and NPI Holdings Limited, and also against their director Daniel Stevens and his father Tony Stevens for arranging mortgages without FCA authorisation and exploiting vulnerable customers who were in financial difficulty.
The judgment found that the defendants arranged unaffordable high-interest bridging loans for consumers who were about to be evicted from their homes, taking huge fees. In some cases, the defendants bought homes, for less than their value, from owners facing repossession, and subsequently rented the properties back to their former owners.
The defendants were not authorised to arrange mortgage contracts or sale-and-rent-back agreements. 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, the individual could not sell or re-mortgage their property. In some cases, this trapped individuals in high-interest bridging loans.
FCA executive director of enforcement and market oversight Mark Steward said ‘These companies and individuals were not just providing financial services without proper authorisation, they were doing so in order to take advantage of people who were struggling and in vulnerable circumstances. Their actions cost consumers large amounts of money in fees, inflated loan interest, and lost equity in their homes. This judgment will help bring financial relief to these consumers.’
In July 2020, the FCA obtained an interim injunction and a freezing order to stop these activities and 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 other potentially affected individuals who were not part of the FCA’s original claim.