Sesame has launched a white paper that calls for clearer lines of responsibility to be drawn on mortgage affordability.
Sesame has launched the document amid concerns that brokers could be left to carry the responsibility if turbulence in the housing market triggers a surge in consumer complaints.
The document has been launched in a bid to urge advisers to ensure they protect themselves from being blamed, if borrowers experience problems.
An integral part of its campaign is its white paper, primarily for brokers, entitled ‘Who is responsible if borrowers take on mortgages they can’t afford?’
The white paper examines the adviser, lender, regulatory and consumer perspectives by looking at how brokers can reconcile their duty to assess affordability in current market conditions.
Neil Walkling, head of compliance services at Sesame, authored the white paper.
He says: “The credit crunch has put the question of affordability firmly in the spotlight, so it is vital for mortgage advisers to get the basics right, such as robust affordability assessments and clear suitability letters.
“This means consumers will be able to make informed decisions, and avoid taking on commitments they have no hope of meeting. But getting the basics wrong may have damaging consequences for both advisers and their clients.”
Walkling adds: “In the end, if advisers believe that customers have little chance of affording the repayments, then they must have the courage not to accept the business.”