When are the mortgage providers going to actually start implementing the new mortgage charter?

Sandwich

The mortgage charter forbearance measures were announced on 23 June. It's now nearly two weeks later and I've noticed from threads on here, and from my own experience that the banks are not actually doing what they've agreed to yet. 

One person mentioned being refused a 6 month switch to interest only (supposed to be guaranteed), and in my case I've had to do an affordability check to do a product transfer (the charter specifically refers to switching to a new deal "without another affordability check"). 

They really seem to be dragging their feet at a time when a lot of customers are really struggling. 

MWT

Two weeks is not a long time when they have to draft new procedures, legal clauses, and potentially introduce software updates to support the changes... 

... and train staff and roll it all out to the various teams.

This isn't like a rate change that is already well provided for in all of those areas....

amnblog

1. The code is voluntary
2. It is open to interpretation by the Lender
3. What MWT says

Individual cases have individual circumstances we are not privy to. 

ACG

Its quite interesting this as I was out with head of sales for a lender earlier in the week.
They said the whole "no questions asked is rubbish". They are going to ask why and they may decline the request. 

If someone says they want to go on holiday or buy a new TV they are not going to do it. Despite the fact they signed up to the charter. 

MattMattMattUK

Sandwich said:

The mortgage charter forbearance measures were announced on 23 June. It's now nearly two weeks later and I've noticed from threads on here, and from my own experience that the banks are not actually doing what they've agreed to yet. 

One person mentioned being refused a 6 month switch to interest only (supposed to be guaranteed), and in my case I've had to do an affordability check to do a product transfer (the charter specifically refers to switching to a new deal "without another affordability check"). 

They really seem to be dragging their feet at a time when a lot of customers are really struggling. 

I would hardly say that not having implemented something in two weeks that likely has significant legal, regulatory and due diligence requirements is hardly surprising. I would expect even before the end of July could be optimistic. 

MWT

ACG said:

They said the whole "no questions asked is rubbish". They are going to ask why and they may decline the request. 

I don't see how it could be any other way, as it would breach their existing responsible lending obligations...

Also, I still think that the '6 month interest only' option is a trap for the unwary, and many are likely to use it inappropriately.

If a customer does not have a dependable way to end the mortgage, or significantly increase their income within that 6 months they are just digging a deeper hole in most cases.

lojo1000

The public and media were taking an increasing interest in mortgage lending and foreclosure policies. 

Hence the Govt needs to be seen doing something and calls for a meeting with the banks to be seen to be doing something.

The meeting objective for the Govt was to be seen doing something and for the banks the objective was to do nothing.

Both sides understand each other going into the meeting and both met their objectives at the meeting.

We've all been to meetings at which you sit there knowing nothing is actually going to change but at least at the end of the meeting you can now say we've had a meeting to discuss what changes can be made and you expect to have more meetings in the near future to discuss the progress of change.

MattMattMattUK

MWT said:

ACG said:

They said the whole "no questions asked is rubbish". They are going to ask why and they may decline the request. 

I don't see how it could be any other way, as it would breach their existing responsible lending obligations...

Also, I still think that the '6 month interest only' option is a trap for the unwary, and many are likely to use it inappropriately.

If a customer does not have a dependable way to end the mortgage, or significantly increase their income within that 6 months they are just digging a deeper hole in most cases.

I know someone who is planning on using it to "save myself some money", they seem to think it will be consequence free, though to be fair they are in general a financial car crash. 

silvercar

ACG said:

Its quite interesting this as I was out with head of sales for a lender earlier in the week.
They said the whole "no questions asked is rubbish". They are going to ask why and they may decline the request. 

If someone says they want to go on holiday or buy a new TV they are not going to do it. Despite the fact they signed up to the charter. 

I thought the whole point was that the lenders were signing up to it and so they had agreed not to deny requests.

silvercar

https://blog.moneysavingexpert.com/2023/6/martin-lewis--the-new-mortgage--forbearance-rules---how-big-a-ch

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1168051/Mortgage_Charter_.pdf

Note: "The lenders, UK finance and the FCA have committed to implementing the full Charter at pace. It is important that borrowers have access to these new measures as soon as possible. It will require changes to the FCA rulebook as well as changes to lenders’ procedures. They will move quickly over the coming days and weeks to implement the Charter and will provide Government with an update on progress by Friday 30 June. The FCA will work rapidly with signatories in order to adopt the necessary rules by Friday 30 June. The FCA’s Consumer Duty coming into force in July will also enable the FCA to support implementation of the Charter by its signatories."

ACG

silvercar said:

ACG said:

Its quite interesting this as I was out with head of sales for a lender earlier in the week.
They said the whole "no questions asked is rubbish". They are going to ask why and they may decline the request. 

If someone says they want to go on holiday or buy a new TV they are not going to do it. Despite the fact they signed up to the charter. 

I thought the whole point was that the lenders were signing up to it and so they had agreed not to deny requests.

But they have to be responsible.
Allowing someone to delay paying off their mortgage, paying extra interest and potentially building up arrears without so much as asking a question and filtering out the people who  just want a bit of extra money in their pocket for a holiday or new tv, they deem as irresponsible. 

Interestingly though, one of my best mates works for a bank and he is saying they are following it to the letter but still implementing it and are having multiple meetings about it. 

One is a building society, one is a bank - 2 very different ways to deal with the enquiries. It seems like it is very much going to be down to the lender.