DTI shuts down mortgage firms

Two companies that took advantage of homeowners who were in financial difficulties have been wound up, it was reported today.

The London Mortgage Exchange and the London Property Exchange were both wound up yesterday, following an investigation by the Department of Trade and Industry.

The DTI said the London Mortgage Exchange, which arranged mortgages and short-term loans, had targeted people who were having financial problems or who were unable to get credit from mainstream lenders.

It said the group, which advertised in the Asian business directory and at Asian wedding fairs, acted in an irresponsible way, offering unsuitable loans to people who were already facing threats that their homes may be repossessed from other lenders.

The firm also ran a consumer credit business without a licence from the Office of Fair Trading.
In addition, it falsely claimed to be a member of the Council of Mortgage Lenders and to adhere to the Mortgage Code when it did not, failed to keep proper accounts and filed the accounts it did keep five months late.

The second company, the London Property Exchange, was set up by the main director of the London Mortgage Exchange, Dipak Patel, to acquire properties from clients who chose to sell their home because of their financial problems.

The firm, which either sold the properties on or rented them out for an income, filed dormant accounts when it was active and did not keep separate accounts from the London Mortgage Exchange.

Mr Patel was not available to comment.