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London mortgage broker banned for fraud

Chianelli, who traded as GCM, also failed to co-operate with the FSA by refusing to provide his customers’ mortgage files, thereby preventing the FSA from assessing whether he was also knowingly involved in the submission of false and misleading mortgage applications for his customers.

Margaret Cole, FSA enforcement director, said: "Chiannelli’s explanation about his income on his mortgage application was not acceptable.

"Nor was his blatant refusal to make his client files available for scrutiny by the FSA. Our crackdown on mortgage fraud continues as a priority in our campaign against financial crime.

"We have banned more than 50 mortgage brokers over the last two and a half years.

"We will continue to ban such people to get across the message that giving false and misleading information to prospective lenders is dishonest."

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  1. Property pro says:

    Anyone as closely connected with property and finance as I am, will have watched with horror in recent years as greedy, commission-driven brokers (often, it must be said, with the implied consent of their lender principals) turned two blind eyes to applicants’ lies about their earnings. Often, they quite blatantly encouraged it, particularly in the buy-to-let sector.

    The “victims” are all of us. Tenants have been thrown out on the street when BTL borrowers overstretched themselves, and property prices soared in response to an endless supply of money, causing proboems for first-time buyers and even professional landlords trying to build their portfolios responsibly.

    We have needed closer regulation for years. When I first took out a mortgage 34 years ago, I had to show a year’s payslips, and evidence through bank statements of my monthly outgoings. We need to go back to that commonsense approach, to ensure that people don’t borrow what they cannot repay. Of course, with most lenders now being commercially-driven banks instead of the old not-for-profit building societies, there will always be an incentive for lenders to try every trick to grow their businesses and steal market share from each other. This needs to be carefully controlled and monitored.

    Hopefully, this news from the FSA signals the return of sanity. It is not a day too soon.