The regulator’s approach was less predictable – and more welcome – than the negative-focus reporting. In taking pre-emptive action now, in a concerted effort with the industry, the regulator is trying to make sure that a potential problem never has the chance to materialise into a real one. And it has made quite clear that it does not see interest-only mortgages as a category of “missold” business.
We all have a role to play in supporting next steps.
At the CML, we have worked hard on the interest-only toolkit to identify good practice and practical strategies for lenders in handling their interest-only back book.
Lenders themselves are refining their communications to ensure that their interest-only customers are alerted and encouraged to discuss their plans – so that their lender can help them identify and adopt a suitable supplementary strategy if necessary.
Mortgage intermediaries have a role to play in ensuring that their own contact with customers supports the steps being taken so that, where customer touchpoints occur, the opportunity is taken to review – and if necessary revise – the customer’s mortgage repayment plans.
If we all do what’s right, there really is no reason why interest-only borrowers should be taken by surprise at maturity about the need to repay.
Just as importantly, if we all do what’s right, there will be no incentive (and certainly no need) for customers to use claims management companies to “help” them address their situation. Given the appalling way in which we have seen the influence of CMCs result in the morphing of genuine PPI complaints into a rise of the most spurious give-it-a-go claims, with all the cost that still attaches to firms even for handling frivolous and vexatious complaints, this can only be a good thing.
Sue Anderson is head of member and external relations at the Council of Mortgage Lenders
