Speaking on Mortgage Solutions mortgage market review masterclass, Graham Sellar, head of business development for mortgages at Santander, said that the majority of Mortgage Charter measures have “already been done day-by-day by lenders”, such as curbing repossessions, coming up with payment solutions for customers and the ability to secure a deal six months before maturity.
“I think the big change for the charter is putting something in the public domain to try and give confidence to the customers that their files won’t be ruined and making sure they know there are options for them.
“But it does bring operational difficulties in bringing that to life. We just don’t know how many customers we’re going to have call us. So will the customers call us? Will their brokers?” he said.
Chris Pearson, head of intermediary mortgages at HSBC, said that it had to “rapidly deploy” a lot of Mortgage Charter components into systems that “sometimes you have to force round holes into square pegs”.
“There is some detail that will need to be worked through and we’re continuing to do that as we go along. It’s been critical we get a rapid deployment so customers can benefit,” he added.
Pearson noted that may be some “manual processes” due to the “fast delivery” and there will be some “devil in the detail” to emerge.
Sellar said that there will be more clarity in the next few weeks as the chancellor and other parties offer more “direction”. He added that those orchestrating the Mortgage Charter wanted measures to be ready for August mortgage payments.
“This isn’t a ‘everybody should do it if they’re worried,’ this is: make sure you only do this as a last resort because it will result in you paying more interest and you only get one chance to do these things,” he added.
Sellar called for brokers listening to the masterclass to the “take the time to understand the rules” as there have been a “lot of muddled conversations in the media and not everything we read is actually true”.
‘Consumers really need to be speaking to an adviser’
Kevin Roberts, managing director of mortgage services at Legal and General, said that the sector would need to be “careful” about the Mortgage Charter and people he had spoken said that take-up of measures had been low.
He explained that if you took a £200,000 mortgage at 6.11 per cent, payments through a capital and interest mortgage repayment would be £1,156 per month whereas interest-only repayment would be £1,019, so there was only £137 difference a month.
“When you start digging into the relief and the help that’s available, I think consumers really need to be speaking to an adviser. It’s not as simple as switching to interest-only and thinking of all of your cost of living concerns go away,” he added.
‘Advice always sits with adviser’
Customers can go directly to the lender to request a better like-for-like deal right up until their new terms starts. However, Pearson said that there was “absolutely no intention whatsoever to squeeze out the really critical and important role of a broker in any of this”.
“Advice always sits with adviser, in this case the broker. We don’t want to be getting involved in those really intricate advice conversations,” he added.
However, he said that there would be “some bits of detail we’re going to need to work through”, such as if a broker arranges a product transfer but the customer contacts the lender directly around switching to an interest-only option.
Pearson said that the broker remains the “key centre of advice and a “real guiding light in what can be potentially a very confusing time for the customer”.
Roberts agreed and added that in the conversations he had had with senior people at lenders there was a “real desire to keep brokers at the centre of things”.
“On the coalface just make sure that message is going all the way through please. I think that you [lenders] want to remain very execution-only and I think there’s real dangers in the conversations that lenders could be having on the Mortgage Charter in sort of making sure that they are executing and not advising,” he explained.
Roberts continued that he thought lenders “will play carefully and play with a very straight bat”.
He added that good advisers “shouldn’t worry because they’ll be in touch with their customers”, and if brokers weren’t then “now’s the time just to think through it”.
To watch the video click below. The video features Amanda Bryden, head of Halifax Intermediaries and Scottish Widows, Chris Pearson, head of intermediary mortgages at HSBC, Kevin Roberts, managing director of mortgage services at Legal and General and Graham Sellar, head of business development – mortgages, Santander UK.
