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FSA calls for clarity on collars

The Financial Services Authority is appealing to lenders to be clear where collars and floors apply on tracker mortgages.

Addressing delegates at the Council of Mortgage Lenders’ annual conference today, Jon Pain, retail markets managing director at the FSA, says: “Tracker interest floors can be a legitimate term of a mortgage.

“But this can only be the case if it is clear and unambiguous to the consumer and is consistently and prominently spelt out in the initial Key Facts Illustration and offer document throughout the sales process.”

He adds: “If it is not lenders run the real risk of both breaching our disclosure requirements and having unfair contract term they can’t enforce.”

Halifax and Nationwide both have collars on some of their tracker products at 3% and 2.75% respectively.

As revealed in this week’s issue of Mortgage Strategy, both lenders have sought legal advice and have confirmed that their collar rates are enforceable should base rate be cut further.

Although Nationwide mentions its collar in its KFI, Halifax’s collar is only mentioned within the mortgage offer.

It is understood that the collar clause was taken out of Halifax’s KFI as a result of pressure from the regulator to reduce the length of the document.


BoS to pay proc fees on product transfer deals

Brokers received an early Christmas present from the Bank of Scotland last week when the lender said it would start paying proc fees on its online product transfer and further advance deals.

Outsourcing in the new world

We are living in a very different world compared with that of just two years ago. Is it possible that there is anyone yet to utter the words ‘credit crunch’, whether at work, at the shops or in the pub? Although some would argue that the situation is not without precedent, the speed with which it has struck has been startling.

Job juggling at Irish banks

Even with the comfort of a 500bn state guarantee, life hasn’t got any easier for Irish banks, with worries about a mountain of bad debts from property developers compounded by a recession that is crippling business.

Chewing over the future

About this time last year Lending Strategy invited a group of senior lending executives to a lunch with David Smith, economics editor of the Sunday Times.

Building long-term relationships

Call us old fashioned, but we want to get to know you personally. That’s why we give you a named case manager and underwriter to look after all your cases from start to finish. Your underwriter will happily give you their number, so you can ring them directly with any questions you have. And your […]


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