Peter Wright, adviser at CBK, said the failure to enforce agencies between brokers and lenders was leading to misinformed consumers getting bad deals.
“Why are mortgage brokers not allowed to have agencies with lenders? And why does the FSA not enforce this for the sake of best advice? Once the deal is completed, the broker is cut out of the relationship and the lender then contacts borrowers directly.
“If a client sets up a two-year interest only mortgage, then it's my duty to go back when that is coming to an end, to examine all the possibilities and change the payment vehicle if necessary. But lenders often prevent that. It's almost as if the FSA is turning its back on the situation.”
Alex Murray, group director of mortgages at Thinc Destiny, agreed. He said: “If a customer stops making the repayments on their mortgage, the broker should be notified as they could help reassess the situation and look for alternative options for the borrower. Instead, the broker is cut out of the loop and the borrower could end up losing their house. Is this treating customers fairly?”
Robin Gordon-Walker, spokesperson for the FSA, said: “The FSA does not police agency agreements, that is not in the regulatory regime. There isn’t an obligation on mortgage advisers to revisit an area once a deal has been completed. While many may well do this because it is good business practice, it just isn’t in our remit to enforce that.”
