Unauthorised Mortgage Broker

[Pinky69]

A friend has discovered that the mortgage broker who brokered her mortgage in 2005 may not have been authorised by the FSA. She found this out when doing research about mis-sold mortgages as she has a good case to make for mis-selling. The broker didn't comply with any of the rules! In trying to trace where he is to make a claim, she checked the FSA and OFT registers and he has never been registered with any of them either as a broker or Appointed Representative of a company. She has sent an SAR to the mortgage company and has asked the FSA if they have any trace of him on their system. There is a long story about this guy and she now knows he is a conman.

 

I have been advising her and have been looking at the Financial Service and Marketing Act to see what kind of redress she might have with the lender, who is not allowed to receive applications from unauthorised third parties. It seems that the agreement becomes unenforceable - so far so good. Then I get to Section 27 which outlines that she can reclaim monies paid and the house. Again, so far so good. Then I come to what it means for her claiming the above and become unstuck because the qualification for claiming in Subsection 7 seems to contradict itself.

 

(7) If the person against whom the agreement is unenforceable—

(a) elects not to perform the agreement, or

(b) as a result of this section, recovers money paid or other property transferred by him under the agreement,

he must repay any money and return any other property received by him under the agreement.

 

 

It seems to contradict itself! On one hand she would have a claim and then she would have to pay it back to the lender! What would the point of that be?? My friend is of the opinion that it may refer to any additional borrowing made after the mortgage was set up ie she would get the funds for the original mortgage back then have to repay anything over and above that, which she doesn't have.

 

 

Can anyone shed any light on this? Thank you.

[Pinky69]

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