London based mortgage brokers Mortgageland Ltd

London based mortgage brokers Mortgageland Ltd  has been publicly censored by the Financial Services Authority, after a number of failures were brought to light in a 2006 visit to the brokers by the FSA. The FSA found that the firm was running a mortgage promotion aimed at consumers with poor credit, defaults, county court judgements, and arrears, but that the company did not place enough emphasis on the APR that was being charged. The APR on loans for people that come into the sub-prime category is typically far higher than the average APR.

The FSA also found that in a separate promotion the firm had not provided details of a fee that customers would be charged, including failure to outline the level of fee that would be charged to the customer. Mortgageland Ltd was also accused by the FSA of failing to note the needs and circumstances of customers, and worryingly in some cases did not take sufficient details of the income and outgoings of customers, thus making it impossible to gauge how the consumer would repay the personal loan.

Many of the customers targeted by Mortgageland were found to be those with adverse credit histories, and the FSA stated that the impact of the firm’s failings would therefore hit even harder on this client group. One official from the FSA stated that a mortgage is a huge financial commitment, and one of the most important steps that most people will ever take.

She said that it was vital that firms provided clear and understandable information to clients regarding mortgage loans, stating: “Poor financial promotions often go hand in hand with other problems at firms. In this case, the firm also demonstrated poor record-keeping, both in terms of assessing suitability and documenting recommendations made."