Moneyback mortgages - ethical?

dwsjarcmcd

MortgageMamma wrote: »

There will always be the ill informed who "trust" their banks and building societies and the consumers who view non reciprocated loyalty to an organisation above saving money, but as time goes by they will dwindle. There will always be the kind who go to MBM, but unless they are lucky on day when their mortgage turns out unsuitable they will be bit on the backside and left to sort out their mess. 66% use brokers. They cannot all be hopeless at maths.

You used ill informed, I said uninformed, same difference. I am not sure the CML monitors the level of business that is advised or non-advised but MBM are intermediaries and I think you will find it is that, that they measure.

I don't disagree with your sentiments but it there are increasing numbers applying diect to lenders online, where they are confortable using their own judgement, just as their are increasing numbers using mortgage intermediaries. What that suggests is a very polarised market, where the losers may be business to bank and building society branches

dunstonh

I do find the various comments along the lines of calling people who arrange their own mortgages as 'uninformed' rather silly and the asertion that those who either arrange their own mortgages or do so via an execution only site mostly getting unsuitable mortgages just plain daft.

Obviously it is the choice of the individual. However, there is a risk that someone of low knowledge going execution only can get it all wrong and mess up. DIY in anything you do carries that risk whether it be arranging your mortgage or decorating your house.

There is a thread in the insurance section that is currently in progress where it appears someone has cancelled a life and PHI policy costing £30 and now paying £8 thinking they have saved a lot of money. In reality, they have got a ASU and life policy which offers a fraction of the cover. Different product class but it highlights the risk.

HelpWhereIcan

MBM are a mortgage broker - they 'broke' mortgages for people, but do not offer advice - as their IDD says

You will not receive advice or a recommendation from us. We may ask

some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

Their sales process is still 'regulated' in that it has to be clear that no advice is being offered or received - hence the IDD, mortgagelinked (the online comparison software) and best buy info. It's just that they have no liability for the customer's choice of product.

They have the same administrative responsibilites and the FSA would still expect them to address a service complaint in a regulated way; but their potential liability to have to compensate the customer for any errors is very low - hence the lower need for qualified staff and lower regulatory costs dunstonh referred to.

As already said the CML figures will include those from non advised firms like MBM. The growth of firms like MBM has been amazing and I cannot see their days ever being numbered - there will always be a significant proportion of the population who will prefer to DIY or follow the non advised route.

MBM are not my competition - we are both after different customers. They have their place, I have mine. L&C have another as do the other large nationals.

I place all my personal investment business through a discount broker after getting some 'off the record' info and advice from one of the IFAs from my network that introduces to me (actually, he's my locum). He does not want my business (I asked) - I am too small fry for him and the commission share would be too small for the regulatory responsibility. Even though I would never complain, accepting my business has a cost to him - a cost that is too large (even if it is only time) to be worth the level of commission/fee he would receive for doing it.

My customers have no need for MBM -some of them are very financially literate and some of them are financially "illiterate". All of them value my service and advice.

MBM's customers have no need for me - and they are not in the wrong because of that.

The OP has no obligation to use anyone. It's a fact of business life - I have a number of people each year who tell me they've "decided against moving" or become impossible to contact - I am sure a high % of them have gone and arranged it themselves or through another broker - possibly even MBM, mForm etc etc.

Frankly, I am not that bothered - pride a bit hurt? yes. In any business you win some and you lose others - I just win more than I lose. I also choose most of those that I want to win.

OP has wasted someone's time and is not my target customer; but immoral and the cause of all the world's wrongs... No. I don't have to justify what I earn to him any more than he has to justify his way of making a living to me.