Mortgage policy manager Lynda Blackwell heard brokers’ tales of frustration with often-unpublished lender affordability criteria at The Mortgage and Protection Event 2013. Having apparently strong cases rejected with no explanation is a particular problem.
Blackwell stressed the regulator only expected brokers to try to meet lenders’ published ‘headline’ criteria. She said the lack of explanation around rejected cases is a concern in terms of broker record-keeping: “We would expect the reason the application didn’t proceed to be on file.”
Brokers vented their anger at the conference after Blackwell addressed the issue of the difference between published headline rates and lenders’ “black box” of internal affordability criteria raised by Legal & General housing boss Stephen Smith in a blog for Mortgage Solutions. Other concerns included the cost to clients if apparently strong applications fail and the impact on broker reputations.
Having forecast the Mortgage Market Review will increase opportunities for brokers earlier in her talk, she commented: “It seems the MMR is putting a spotlight on the way the relationship [between lenders and brokers] is not working very well at all.”
The FCA is listening to broker representatives such as the Association of Mortgage Intermediaries and proposals such as date stamping cases in order to monitor criteria changes over time and more consistent published lender criteria. Blackwell said she is willing to hear from other broker groups as well.
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