Regulator brands mortgage broker a "disgrace" to the financial services industry and hands out record fine.

A Birmingham-based mortgage broker has been fined £1m and been banned from working in financial services after mis-selling controversial "sale and rent back" leases to vulnerable customers. The Financial Conduct Authority said Gurpreet Singh Chadda, who traded under the names Red2Black Homes and B&L Homes, had misled vulnerable customers who were already in severe financial difficulties about the nature of his sale and rent back arrangements. Under these deals – which have now been virtually outlawed – families who are struggling with their mortgage sell their home at a knock-down price in exchange for a long-term rental agreement. But widespread problems emerged as many of the rental agreements could be subject to change, leaving families unable to afford sky-high rents and forced to move, but without the full market value of their property to clear other outstanding debts. The FCA said Mr Chadda had told customers the price offered was based on an independent valuation of their property, when in fact this was not the case. In three of the seven cases investigated sellers received less than half the market value of their home, and in two of these cases the seller received only 38pc of its true value....Read more here