FCA Consultation on Fees & Levies for 2024/25

Members may have seen that the FCA issued their annual consultation on the fees charged to firms on Tuesday 9th March – AMI comments…

Consumer Duty has made vulnerability about ‘characteristics’ rather than ‘binary’

Chloe Timperley’s comments from the British Specialist Lending Senate 2024 regulatory expectations around vulnerability…

Your March update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his March update, including the Mortgage Charter and the FCA annual business plan…

Sexism in the City feedback: recommendations for firms

The feedback report for the September Sexism in the City paper has been released. We are cited in the report, relating to our event code of conduct…

AI will not replace ‘divergent or creative’ thinking

Chloe Timperley’s comments from the British Specialist Lending Senate 2024 on generative AI and regulatory expectations around vulnerability…

Mortgage Brokers: The climate is changing, should you?

The Mortgage Climate Action Group (MCAG) is delighted to invite you to its upcoming webinar: ‘The Climate is Changing, Should You?’ on 18th March at 10am…

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FOS Cases of interest to Mortgage Intermediary Firms

The customer was looking to move house and contacted their lender to discuss porting their existing mortgage, with additional borrowing which was deemed affordable by the lender. After having an offer accepted on a property, the customer was told that the lender’s timescales had lengthened (application to offer had increased from six to eight weeks to between eight and ten, which the lender said was due to Covid-19 pressures).

The lender told the customer they would receive a call back, which never happened. The customer chased and was told to contact the lender if they hadn’t heard anything by a certain date. This date passed and Mr and Mrs M decided to cancel their application and go to another lender. They were charged an ERC upon redeeming their existing mortgage.

The Ombudsman felt Mr and Mrs M’s decision to move to another lender was highly influenced by the original lender’s failure to contact them. It concluded the lender should refund the ERC. Complaint upheld.

AMI comments: Whilst a lender case, it highlights to mortgage intermediary firms the importance of meeting the service standards it has communicated to its customers. This will become even more relevant with the FCA’s Consumer Duty coming into force next year.

Based on records supplied from the firm’s systems, the Ombudsman was satisfied the mortgage intermediary firm had provided the relevant information to Miss H and Mr S. However, the firm acknowledged that the information relating to the administration fee wasn’t included in the key facts document (although the Ombudsman acknowledged that this information would have been provided in other documentation).

The firm agreed to waive the administration fee. The Ombudsman felt there was nothing further the firm should be asked to do. Complaint not upheld.

AMI comments: Firms should ensure they are satisfied that their fees are adequately reflected in relevant customer facing documentation.

Ms B moved back into her Buy to Let property not realising this was a breach of the terms of her mortgage contract. Upon discussing this with her mortgage adviser, she was advised to repay the mortgage immediately to avoid losing the property. Although she had sufficient cash to cover her living costs, she did not have enough to repay the mortgage and, with no income, Ms B would have been ineligible for a new residential mortgage.

Her plan was to sell the property and move to another part of the country with the equity, but first she wanted to complete renovation works to add value to the property. To buy her time, the adviser said her only option was to take out a high-cost bridging loan – and in the end she took out two due to delays. She later complained, having felt she had received poor advice.

FOS disagreed that a bridging loan was Ms B’s only option, as the BTL lender had a forbearance policy that would have granted Ms B the time she needed. The bridging finance was therefore ruled to be unsuitable advice, and the adviser was ordered to pay redress. Complaint upheld.

AMI Comments: If a consumer is faced with potential repossession, advisers should always contact lenders to find out both their forbearance policies – especially before recommending a financial product as a solution.

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