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Most brokers report mortgage prisoner issue: AMI

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The vast majority of brokers think there is a mortgage prisoner problem despite the Financial Conduct Authority pouring cold water on the topic, according to research from the Association of Mortgage Intermediaries.

The AMI and NMG Consulting research says that 86 per cent of brokers believe there is still a mortgage prisoner issue.

Of those, a quarter felt that the problem was getting worse while the rest say that the problem is improving.

However, the FCA said it saw no problem with mortgage prisoners in its May 2016 Responsible Lending Thematic Review.

Of the brokers surveyed, 76 per cent said fewer than 10 per cent of their clients were mortgage prisoners, while 18 per cent say this category made up between 10 and 20 per cent of their book.

Six per cent of brokers have more than 20 per cent of their clients who are unable to remortgage onto a better deal.

AMI chief executive Robert Sinclair says: “Despite the assurances from lenders, lender trade bodies and our regulator, we continue to hear evidence for our firms of a continuing problem.

“Whilst interest rates remain low, the issue is unlikely to surface significantly. However as soon as rates rise we have no doubt that what is a trickling stream will become a flood and the industry will have to address matters.”

Sinclair says the ‘mortgage prisoner’ label includes a range of issues including weak loan to value, prior self certification, interest only, self employed and those with credit blips but a good mortgage payment record.

He adds: “We hope that the supervision teams at FCA begin to take this seriously and look properly at the extent of this issue and whether all lenders are acting in the best interest of all their mortgage customers.”

Earlier this month the trade body mentioned mortgage prisoners as a continuing problem in its quarterly economic bulletin.

The FCA has been approached for comment.

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