Bad mortgage advice!

manich44

Hi,

If a Broker placed someone on an adverse high interest mortgage; advising them that it was the only deal available to them ,when that person didnt have adverse credit, and purely because this lender offered large cash incentives to the broker,in what way is he breaking the law.What are the FSA rules on this and can the broker use client naievity as a get out clause?

Thanks......:(

anh1904

I think the buyer should always be aware.

Seek an independant, whole of market, advisor, but as you would be willing to pay any other expert, expect to pay for this persons services.

You can, and always should, ask what commission or charging structure is in place, and what limitations the advice is subject to.

Peelerfart

Couldn't "the person who didnt have adverse credit" have told the broker at the time that he didn't have adverse credit?

kingstreet

manich44 wrote: »

Hi,

If a Broker placed someone on an adverse high interest mortgage; advising them that it was the only deal available to them ,when that person didnt have adverse credit, and purely because this lender offered large cash incentives to the broker,in what way is he breaking the law.What are the FSA rules on this and can the broker use client naievity as a get out clause?

Thanks......:(

Does the borrower have a copy of his credit files from the time of the application, proving there was no adverse credit information? Was this before or after the start of statutory regulation, October/November 2004?

About ten minutes ago I was reading about a broker receiving a complaint similar to this one where the adverse credit information was there at the time of the advice, but had since "dropped off" in the intervening period.

The borrower should carefully study the IDD, factfind, KFI and suitability letter from the time the advice was given before proceeding further. It may be sensible to obtain copies from the broker, if they are not immediately to hand.

If a case of unsuitable advice can be established, the borrower should make a formal complaint to the broker, or his network or employing company, exhausting the broker's complaints procedure before escalating the issue to the Financial Ombudsman Service if the broker does not provide a satisfactory conclusion.

dunstonh

in what way is he breaking the law

he isnt.

What are the FSA rules on this and can the broker use client naievity as a get out clause?

If the mortgage adviser is limited panel then its possible that it may have been the right option within the remit of the adviser. If the adviser was independent then all they have to do is show that they considered prime or near prime but couldnt get it for xyz reasons. If they cant do that then it is a potential mis-sale.

Conrad

He would be rule breaking where the recommended mortgage did not dovetail with the buyers needs. If this can be shown, then a misselling case may be in order. The buyer needs to complain and must get a full and final decision from the broker within a few weeks. If unsatisfied, it's over to the Ombudsman.

This sort of thing is quite common and I've known of brokers blatently offering such products as they paid high commission and / or could not use ordinary high st lenders (just not set up to).

However, another possibility is that a sub prime lender was used for other reasons such as client being unable to proove income, but even so, the recommended mortgage has to have been suited to the client, meaning it must be affordable etc.

GMS

Was this purely down to adverse credit or is there more to it?

Could it have been a self cert self employed with little or no trading?

Sub prime lenders were offering day 1 self employed self cert products at one point. Was it something along these lines?