Harle said Quilter supports the Financial Conduct Authority’s (FCA) call to arms, and says the network’s brokers stand ready to come to the aid of homeowners trapped on expensive deals issued before the financial crisis.
Last week, the FCA announced it was compiling a directory of advisers who were wiling to help mortgage prisoners move to a deal with an active lender or offer them additional support to ease their financial difficulties.
To be added to the regulator’s list, brokers must have whole of market access and be able to advise on, or refer to, later life options and debt consolidation solutions.
Harle said: “For many mortgage holders who are trapped paying over the odds, the ramifications of the last crisis are still being felt as they are unable to switch to a better deal thanks to the affordability rules introduced in the wake of the 2008 crisis.
“What the rules are effectively saying is that these borrowers cannot afford to pay less each month.
“This is illogical, and Quilter is ready to support these customers throughout the entire journey, to help them find a better deal or guide them to other solutions and debt advice if necessary.”
New rules introduced by the FCA in October allow lenders to assess affordability based on a borrower’s track record of making mortgage payments, which should help around 170,000 borrowers accesses cheaper deals.
Harle said the FCA’s rules would only be effective if lenders were willing to apply the new assessment and offer a product for mortgage prisoners to allow them to switch.
But at a time when many banks are being forced to set aside capital for impairment losses as homeowners struggle with financial hardship because of the pandemic, Harle said it was unlikely lenders would make these changes soon.
She added: “All is not lost for this group. In some instances, there may be scenarios that people think they are mortgage prisoners, when in fact there are other options available.
“This group should never have been put into this position and it is unthinkable they remain in it. We will do as much as we can to support people harmed, but lenders and the regulator need to work together to help as far as they possibly can and ensure this never happens again.”
Gail Smyth, principle and founder of Charles Mac, a member of Quilter’s network, said: “This is an issue close to my heart having worked closely with groups campaigning on behalf of mortgage prisoners over the past few years. Time and time again we hear devastating stories of the financial and emotional impact of being a mortgage prisoner and it is not right that this is allowed to continue.
“Advisers are well placed to do the heavy lifting for mortgage prisoners and offer potential solutions.
“We are supportive of the FCA’s call for intermediaries to support mortgage prisoners and believe the eventual list should be compiled based on location, so that clients are working with brokers that really know their area in terms of property values and other criteria.”
