An 'unacceptable' number of mortgage brokers are 'unwilling to change', the industry watchdog yesterday said in a stinging criticism of poor lending practices. Financial Times, Daily Telegraph

The Financial Services Authority said that a review of the industry had revealed room for improvement in the assessment of affordability, the collection of customer information and the use of management information. It added that there were areas where current practices could lead to an increased risk of fraud and money laundering.

Of the 345 firms the regulator reviewed, seven have been referred to the FSA’s enforcement team and another handful are still being considered for the same treatment. A further 65 firms have said they will undertake past business reviews, an FSA-monitored process that could lead to individual cases of repayment or compensation. Four firms have actually ceased business until they can rectify failings.

'There are still an unacceptable number of firms unwilling to change and they are damaging the rest of the industry,” said Stephen Bland, sector leader for retail intermediary firms at the FSA.

'We found some firms willing to offer mortgages they know to be unaffordable and to accept self-cert business even where they had concerns that the financial information provided by the customer was implausible,' he added.