Whats the largest mortage we could get?

infobank

I've copied and pasted the actual text below, directly from the FSA web site:
Statement made by mortgage broker:

"I suggest you take out (or do not take out)
a mortgage with ABC Building Society."

FSA's postion on this:

"No. This is not advice which
steers the borrower in the
direction of a particular
mortgage which the borrower
could enter into. However, if the
society only offers one
mortgage, this would be a
recommendation intended
implicitly to steer the borrower
in the direction of that particular
mortgage which the borrower
could enter into and therefore
would be advice."

If someone .. anyone... regulated by the FSA or not, cannot make such a statement without fear of the consequences of court action, then it is a sad state of affairs that we have have to contend with.
That is why the FSA laid down these rules, so as not to stop normal every day general advice and guidance.
They class it as "information" not "advice" and the more informed the consumer is, the better able they are to make their own choices.
You may well decide not to give out lenders details that could assist a borrower in trouble, or in need of a guiding hand to point them towards a lender that can help them, but that does not mean that it is wrong or "not allowed"
Quite the opposite.
The FSA seems to encourage openess and freedom of information.
The FSA only requires you to know your customer if you are going to give them "advice...not if you are going to give them "information"

MortgageMamma

info bank? are you actually a regulated advisor in any industry?

I dont mean to be rude but if you are not you have no inside knowledge and your perception of the FSA rulebook is likely to be very different than that of an experienced advisor. I echo herbiesjp comments, we will not comment on individual lender names as it could be construed as a recommendation. neither of the lenders in the other posts were actually the lender I had in mind, as the lender i know is far more competitive. I'm not giving the lender name on prinicpal that it is my hard earned knowledge and that of other advisors. If you want the lenders disclosed, seek advice.

Would a mechanic show you how to fix a problem with your car then send you away to do it yourself for free??!!

infobank

I would hope that a mechanic would tell me that I need a new battery, when my car wont start, and not withhold the information until I paid him.

You dont have to name lenders.
Thats your choice.

The concern that naming a lender that will lend 4.4 x income can be construed as giving advice on a regulated mortgage contract seems to border a little on paranoia.

As an example, I used this link on this web site - moneysavingexpert.com:
http://www.moneysavingexpert.com/mortgages
and used the link to moneysupermarket.com, put in details that needed to offer me a lender that would go to 4.4 x income and came up with First Active, HSBC,Alliance and Liecester, C&G and Northern Rock.
OOOps !

Perhaps someone should tell moneysupermarket that they are giving out the lenders names without asking for money, and worse still at risk of being accused of giving advice, and their perception of the FSA rule book is wrong.

Or maybe... just maybe.... they've read the rule book, and maybe they only charge for giving actual "mortgage advice" and not for information that is available in the public domain, and on lenders own web sites:

http://www.alliance-leicester.co.uk/mortgages/index.asp?page=affordabilitycalc&buyertype=unknown&ct=mortgagesellmenu

try the above link.
put in some figures.
I got an income multiple of 4.4875 x joint incomes.

So because I am naming here the Alliance and Leicester as a lender that will lend more than 4.4 x joint incomes have I just given advice?
Somehow,I dont think so.

However, if someone can get away with chargeing a fee for this easily obtainable "information" I have to take my hat off to them.
Not for being clever .......... just for being brazen enough to do it and then try and justify it.

stanmoresaver

infobank wrote:

However, if someone can get away with chargeing a fee for this easily obtainable "information" I have to take my hat off to them.
Not for being clever .......... just for being brazen enough to do it and then try and justify it.

I don't think this is all that the broker does-

For my tuppenth worth- i won't post lenders names because:-

1/ i don't want any possible liability for any perceived advice- whether now or in the future.

2/ i cannot understand the concept of DIY for mortgages, when, without paying a fee, there are plenty of brokers who will arange the mortgage for what the lender pays them, and 99.9% of the time, the product is as least as good (and often better) as that which can be got directly.

3/ because there are some people who insult my profession by suggesting that the role of a broker is just " finding easily obtainable information".

SS

infobank

1. If the person revealing the lenders names used a pseudonym, and therefor was not traceable (easily done on a forum board) then it would not be possible to be accused of giving advice (as the person would be an unknown) - unless of course the person had a reason to make themselves known i.e. using these boards to tout for business ?

2. The concept of DIY is easy to understand if you accept the presence of the financial ombudsman service (deals with, amongst other things, complaints about the advice given my mortgage advisers.)
There are people on this planet who dont want to sit through an intrusive "fact find", havn't got the time, dont need to be told what they should have and sign a disclaimer if they disagree with the advisers recommendation (just to cover him/her)

3. Sorry you feel my comments "insult your profession".
The phrase "The lady doth protest too much, methinks" comes to mind.

MortgageMamma

"infobank".

Why don't you just button it? you've clearly no idea what you are talking about. You can quote as many times as you like out of as many rulebooks as you like, but still, if you don't work as a broker you've really no idea. I don't know what it is exactly that you are trying to prove or achieve in criticising the work of a broker? You might think that by posting on here you can influence a lot of people, but I doubt you will, most are happy to accept generic advice.

Like you say it is my choice to name or not name a lender, and I've excerised that choice. The brokers are here to give free GENERIC advice, not as a free for all recommendation service. What do you think we are, charities or something?!

Anyway, the lender wasn't the Alliance & Leicester either, far far more competitive than A & L. You'll have to scour the internet and boil your brain a bit harder.

Good luck

homer_j_3

infobank wrote:

2. The concept of DIY is easy to understand if you accept the presence of the financial ombudsman service (deals with, amongst other things, complaints about the advice given my mortgage advisers.)
There are people on this planet who dont want to sit through an intrusive "fact find", havn't got the time, dont need to be told what they should have and sign a disclaimer if they disagree with the advisers recommendation (just to cover him/her)

Eh? If you do it yourself and choose a product and product provider yourself then the role of the FOS becomes irrelevant as you have not received advice - you have chosen this yourself?

The only role you can count on the FOS for really is if you have a complaint about the company you have chosen.

Going through intrusive factfinds is only providing what information we need to put in the application. Yes we may ask more in deth questions sometimes but on the whole, you normally give most of the information you would give a broker in an application form

With regards to signing disclaimers- well that is because we brokers have accountability unlike the general public and if a client chooses not to take something out, say critical illness cover for example, and then gets diagnosed with a critical illness and makes a complaint against the broker for not recommending it - how are we supposed to account for ourselves? The FSA will not accept it any other way.

Its a little like the endowment misselling - how many people have claimed and said bad advice was given, how many have been paid out on the basis of no evidence to suggest correct advice was given or not and benefit of doubt has been given to the customer? The fact is if there had been the kind of regulation and foresight to ask advisers to justify their advice to the extent there is now, this would never of happened. I am not saying missellig didnt happen because I know it did but all I am saying is we live in a world of lessons learnt.

Brokers today are qualified, accountable professionals and can ensure that you have a product that is most suitable to their clients needs. We are not dodgy salesman after the quick buck.

Try going to your Dr and asking for a prescription without diagnosis. You wont get it...

TangentMan

I too do not believe that saying what a lender offers does not construe advice, neither would it be a financial promotion. Otherwise, this whole website would be breaching regulations left right and centre!

If i say "Big bank offers offset mortgages" that is not advice, its a statement of fact. "Small BS offers 6 times income" is similarly a statement of fact.

However, it is certainly true, as the FAs on here have also stated, that the brokers have to make their money and simply giving away all the knowledge for nothing is not going to get them any money. I can't see why anyone would object to that. Clearly MortgageMomma knows who will give 4.4 x income and seemingly the non-advisors have not found out, thus proving the value that would be added.

I am always slightly amused by "Whole of Market" - that presumably includes exclusives to which the "Whole of Market" brokers themselves are not eligible? And does "whole of market" include statements that i have seen on this forum such as "I would never recommend such and such a lender ... " ? And, interestingly, the FAs that wouldn't recommend a certain lender, hold that approach without doing a fact find.

homer_j_3

TangentMan wrote:

I too do not believe that saying what a lender offers does not construe advice, neither would it be a financial promotion. Otherwise, this whole website would be breaching regulations left right and centre!

If i say "Big bank offers offset mortgages" that is not advice, its a statement of fact. "Small BS offers 6 times income" is similarly a statement of fact.

However, it is certainly true, as the FAs on here have also stated, that the brokers have to make their money and simply giving away all the knowledge for nothing is not going to get them any money. I can't see why anyone would object to that. Clearly MortgageMomma knows who will give 4.4 x income and seemingly the non-advisors have not found out, thus proving the value that would be added.

I am always slightly amused by "Whole of Market" - that presumably includes exclusives to which the "Whole of Market" brokers themselves are not eligible? And does "whole of market" include statements that i have seen on this forum such as "I would never recommend such and such a lender ... " ? And, interestingly, the FAs that wouldn't recommend a certain lender, hold that approach without doing a fact find.

If a broker on this forum was to make a statement of fact in terms of ABC Bank offers this feature then what is perceived by Joe Public is that the ABC Bank must be the bank for them as they offer what he/she wants and needs.

There could be 20 other lenders out there that offer the same features and may be more competetive and better suited to Joe Public than ABC Bank.

Without knowing Joe Publics' current circumstances and aspirations in full, said broker cannot recommend a product as any recommendations made have to be the most suitable for Joe Public.

If Joe Public takes ABC Bank product (whether it be their only product or one of several) then they have acted purely on the recommendation of said broker.

Now, I feel that if said broker said that the 20 lenders that can offer this feature are.. and named all of them without promoting one over the other then that would be different because they are being factual. However, in the reality of doing this, could the broker realistically expect Joe Public to get the best product? No. Could the Broker be certain that at the time of signing up to the deal, no other providers could offer a better deal? No. This therefore puts broker in a position or most suitable advice - it may not be at the time of sign up.

A broker may comment on a certain lender, for example I remember a post asking about Birmingham Midshires and if anybody had heard of them. A couple of brokers including myself said that we knew them well and gave our experience of dealing with them - ie " they usually process cases fairly quickly and have good customer service" This cannot be deemed advice because we had not introduced the idea of BM to this person and we have not given any information that might imply that we are saying their products are most suitable for that person.

TangentMan

Hmm. I think you are constructing a scenario that happily meets the outcome you want (which is a non-commercial reason for not revealing this information a reason i think is good enough and can't see why people would get upset about it).

If you read the signatures of the people posting here. The ones who fear their comments being construed as advice contain a disclaimer.

Or you could just say "ABC offers 112 x income - there may be others and their products may not be right for you". There you go covered.