You can take another look at the week’s news and we’ll round up the stand-out, most thought-provoking or unmissable comments posted after stories or sent straight through to the editor.
Comment any time on the Mortgage Solutions website and you could feature in next week’s Mortgage Mutterings.
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Expo 2010: Brokers “must beware fraud or be struck off”
Mortgage Solutions | 12 Nov 2010 | 09:59
Kay McLellan
Should this not be an opportunity for the mortgage adviser to provide an extra safeguard for the lender against being defrauded.
If we can reduce the lender’s risk then they will make more money.
If the lenders agreed to pay higher proc fees based on reduced fraud the adviser and lenders can both benefit.
Carrot and stick approach.
David
12 Nov 2010 | 16:17
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Isn’t this latest move from Which? a fascinating one?
The comments made by the broker community since the announcement by Which? shows just how polarised and mistrusting professional advisers are of the self-professed consumers champion.
Consumer groups, regulators and MPs – who talk a blinding theoretical game – cannot see sense and sadly remain immune to the effects of their unrealistic demands. Brokers know the current obligations placed on the advice process are unworkable and impractical. But now Which? join the rank of adviser and take centre stage at the sharp-end of some of their own unworkable standards.
Bottom line is, pretty much all brokers want them to fail miserably for two reasons. Firstly, Which? have lauded it about to their readers for too long, that financial service businesses are greedy, self-centred entities without moral compass. And redress is only a letter away thanks to the impossible MCOB rules brokers have to follow. Incidentally, these MCOB rules are the same ones consumer groups like Which? campaigned so hard to shape.
Secondly, and most importantly, a Which? advisory failure could be the catalyst for a long march back to common sense regulation.
Mortgage advice brings significant long-term responsibility for brokers and regulated firms; and brokers will look forward to reminding Chris Gardner of his words, “We will make sure that customers have a clear understanding of whether a mortgage is affordable and what the long-and short-term implications of selecting a particular mortgage are”.
If he thinks his firm/advisers obligation – of assessing affordability – ends at the point of sale as he implies, he is in for a big surprise. Thanks to Which? consumers know their rights and affordability remains the responsibility of brokers and their firms for the full mortgage term.
On the positive side who knows, given time, a new entity might emerge, called the ‘Business Association’ the business champion!
Chris Ridgeway
11 Nov 2010 | 19:25
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Expo 2010: Tiuta welcomes regulation in BTL market
Mortgage Solutions | 11 Nov 2010 | 09:23
Simret Samra
BTL and the FSA?
Mentioning ‘simple’ in the same breath as the FSA suggests that Tiuta is being gracious or just possesses an over-optimistic view of the FSA. When has the FSA produced anything simple yet? Given the financial services industry had well over a decade and failed at self-regulation, forming a ‘responsible’ body for the regulation of residential mortgages made sense and was well under-way through the MCCB.
Having served within the UK financial services industry for more than 30-years including conducting a mortgage brokerage pre-FSA, one wonders what consequences BTL regulation will have on other factors including lenders rates and business taxation should they, for instance, change BTL’s current ‘commercial’ status? I sincerely hope the EU’s more liberal caveat emptor approach to trade will force a greater degree of common sense within our battered industry.
John Grant
11 Nov 2010 | 12:36
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City has hit regulatory overkill, says BSA
Mortgage Solutions | 11 Nov 2010 | 17:12
Vicky Hartley
Regulatory overkill is the understatement of the decade. Red tape is strangling the industry – even as the industry gasps and drops to its knees the FSA and a dozen other regulatory bodies tighten their grip still further. And what will be the final outcome? Will the UK consumer be better served by the only institutions left to provide guidance – the banks?
Will the customer be better informed and have better products following the death of the IFA sector? It won’t be long before there will only be 3 elements to the UK financial services industry – the banks, the regulators and a million compliance people.
Bill Wells
12 Nov 2010 | 14:23
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White knights
What a surprise. So targets drive inappropriate sales. Of course, high proc fees never tempted any brokers and nor would any of them ever be tempted to indulge in collusion to get the customer what they want so that they get paid. Reading these comments, you’d think that arrears and possessions are a phenomenon that has only come about since the crunch. Publish the worst offenders? Number of resultant arrears and possessions? Get real.
We know from Shelter/CIH research that in most cases arrears and possessions are caused by a change in income & nothing to do with inflated incomes at the time of the loan so even if it were possible, actually the results might surprise you. Its a pity some in the industry can’t see they harm themselves as much as the ‘evil lenders’ with such emotive comments.
Within any industry there are those who will cheat and lie to get what they want. Let’s not pretend parts of the financial services industry are better or worse. Its probably true lenders should have been more careful – but equally, at the time, many, many brokers were moaning about how much effort it is to provide income verification. I’ve had lots of conversations with brokers trying to bully me into accepting a case… that simply doesn’t happen with lender’s own staff. On the other hand, I know of other brokers who are offering great advice and are utterly reliable. You’re supposed to be professionals. Stop whining and looking for scapegoats and soundbites and consider the facts rationally.
Michael
11 Nov 2010 | 08:22
Comment two
How many lenders will be banned?
Having rightly banned 100 brokers for mortgage fraud I hope the FSA will take a similarly tough stance with the lenders, particularly as the FSA are already acknowledging that targets and incentives have lead to staff collusion in fraud. Please publish the list of worst offenders, number of resultant arrears, repossessions etc.
How many will be banned? I suspect ZERO.
Malcolm Simpson
10 – November – 2010 18:17
Remortgage comeback?
Surely it depends on the existing lender. The ‘quality’ lenders SVR which borrowers default to on expiry of a product is generally lower than most of the ‘deals’ now available in the market place. Therefore the demand for remortgages will be driven by those lenders whose standard variable do NOT reflect where base rate is. Even then the lower LTV at which remortgage can take place combined with falling property values suggest this comeback is likely to be muted. Still it makes a good story!
Duncan Jones
10 Nov 2010 | 15:02
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Industry bemused by Which? advice service launch
Mortgage Solutions | 08 Nov 2010 | 16:54
Curates egg
I used to be a member of the Consumers Association and based on its best buy advice I bought a laser printer that turned out to a pile of… I also bought a washing machine.. it flooded the kitchen on its first use.
The point is that being a white knight for consumers clashes with becoming a product seller and just as I had a couple of poor experiences with Which? recommendations, so will members seeking unbiased advice.
Let’s face it. The system always works on the basis that the adviser is wrong even when they are right. Far better for the Consumers Association to research the availability of good advice and promote the experiences of their members.
Mervyn Thomas
08 – November – 2010 18:11
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Have a great weekend.
From the Mortgage Solutions team.
