Launching its report ‘Who Is Responsible If Borrowers Take On Mortgages They Can’t Afford?’, the network believed that greater clarity was needed over how responsible each party in the mortgage transaction was.
Sesame believed that with home owners being squeezed in the current environment, complaints over irresponsible behaviour to the Financial Ombudsman Service (FOS) would rise and brokers needed to act now to ensure they had as much information as possible on the lending decision to protect themselves.
Neil Walkling, head of compliance services at Sesame, said: “My concern is that if there is a sharp rise in repossessions, it is likely that the FOS will experience a surge in complaints about ‘unsuitable’ advice or ‘irresponsible’ lending. When they come, will the complaints be made against brokers or lenders?
"One thing is for certain – brokers leave themselves open to the risk of complaints being upheld if their records fail to demonstrate that the mortgages they recommend are affordable.
“Within the White Paper, we question whether it is reasonable for lenders, advisers or the regulator to take the blame when the decisions consumers make with their eyes open backfire. We believe more clarity is required.”
Darren Pescod, managing director of The Mortgage Broker Ltd, said: “The responsibility has to lie with the lender. The broker is only broking the client’s needs and finding them the right lender. We are the middle men in this transaction, doing our job in a compliant way.”
