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Star Letter Extra 29/08/14

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  • 29/08/2014
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Star Letter Extra 29/08/14
Each Friday, Mortgage Solutions takes a look back at the most opinionated or thoughtful reader comments on the website or letters to the editor.

FCA fines RBS and Natwest £14.5m over mortgage advice

Unbelievable? Not really. There has always been concern at the quality of advice provided by in-house advisers and these findings confirm the problem is even worse than expected.

Ah well, it is only taxpayers’ money, and I believe the person in charge of retail mortgages at the time of this fiasco has since been promoted to group chief executive. What a mad world we live in. Plus, not much comfort for the advisers arbitrarily banned from submitting applications to NatWest without recourse or explanation or appeal.

HW

Say hello, wave goodbye…

Great words Nigel and a superb tribute to a very inspiring man. Grenville I wish you well. You will be missed!

Chris Bramham

CML raises MMR product-switching concerns

I believe the FCA raised its concerns several months ago! Something about Treating Customers Fairly (TCF). As expected the lenders are ignoring it and profiting while borrowers remain on a variable rate. I doubt that the CML puffing it’s chest will make any difference.

John

Say hello, wave goodbye…

Grenville has been instrumental in building the Countrywide group into a formidable listed company that has the backing and expertise to go from strength to strength.

His knowledge and leadership are legendary and being able to take this into non-executive directorship will be a valuable asset to the firm.

Martin Richardson

Lenders call for leeway on execution-only sales

I suspect the reality for lenders is that transactions that were previously straightforward (rate switches, term changes, adding names, etc) and processed by administration staff now require a qualified adviser to interact with the borrowers and of course coupled with the typical burdensome compliance process requiring a 3 hour meeting.

This means the cost of servicing existing borrowers for lenders will rise significantly, especially when there is not enough qualified people to recruit and they are competing with brokers who can either pay more or will simply nab the adviser once they have reached competence. Admin. staff might be £15,000 pa. away from London and dozens can be managed collectively by a supervisor on £22,000.

However, I have seen banks advertising £28,000 to £40,000 plus bonuses *(as would be expected) and other perks for qualified advisers who in turn require qualified supervisors with a span of control for maybe 10-12.

Accordingly, the CML is forced to make this request on behalf of its members, but it is likely to fail as a key concern, and so purpose, for MMR was that as soon as a borrower has any “live interaction” then there is a risk of guidance, opinion, suggestion, etc. – also known as “advice” – by an unqualified administrator.

For consumers, this situation has caused real detriment and I am seeing examples weekly where borrowers cannot deal with their current lender and come to us – which is sort of good news when it is the likes of HSBC and First Direct borrowers I suppose. My suggestion, which is a little biased perhaps, is that lenders pay brokers to undertake this work for them, which has to be cheaper than employing qualified advisers.

Imagine if your clients could come to you for normal transactional work and the lender pays even a small fee for the assistance. The BDMs would naturally assist with the process, but it would be a great service delivery (for both lender and broker) and allow borrowers to use the broker they know instead of the previously faceless call-centres where someone different would be answering the call every time. Perhaps if the FCA says “no” to this request, some lenders will have to give this serious consideration.

Arron – Temple Capital

Thank you for your comments this week

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