The Financial Services Authority has expressed concern that borrowers are being placed on sub-prime deals when they could be eligible for prime products.Michael Lord, head of the FSA’s department responsible for supervising small mortgage firms, warns that higher rates of commission could be an incentive for advisers to recommend a sub-prime product to clients. He says: “We will be looking at the sub-prime market mainly because of the vulnerability of customers but also because we have seen customers getting sub-prime products when they might have been suitable for a prime one. In these situations the incentive would be the higher commission.” Lord adds that the FSA is also looking at whether it is financially advisable for adverse borrowers who have improved their credit profile to move onto a prime deal. He asks: “Are brokers taking the full cost of the transition into account and do these counteract the lower rate of a prime product?” Ray Boulger, senior technical manager at John Charcol, says: “FSA rules state that a broker must recommend the most suitable product. The problem arises with brokers working only in the sub-prime market that don’t know what is available in the prime market.” See Cover Story
Purely Mortgages has shed 19 of its 45 sales staff, the Times newspaper has reported.The mortgage broker, which is majority-owned by Vincent Tchenguiz, has reportedly told its staff their job losses are part of a restructuring of the firm.Purely Mortgages has already had two previous financial restructurings in the past nine months.It was disclosed that […]
The Building Societies Association has revealed 5.8m was donated to various causes through affinity accounts in 2005.The figure comes from a survey conducted amongst BSA members, and is the first ever research into affinity accounts.Primarily offered by building societies, affinity accounts allow people to automatically donate part of the interest on their accounts to sports […]
My son is fast approaching his 18th birthday (I know – I don’t look old enough) and while a big party might be on the family planner I’m also considering how to help fund his university years.
Hamptons International Mortgages has called for the Annual Percentage Rate on mortgage products to be scrapped. The call comes as the UKs largest lender the Halifax has joined Nationwide, Woolwich and Northern Rock in offering existing clients new rates.The APR is used to give an indication of the cost of a loan over the entire […]
Over the last seven years you have probably read countless articles and had endless discussions about when the Federal Reserve (Fed) is next going to hike. The chart below shows the Fed Funds rate implied by the market at the beginning of each year since 2010. The Fed did finally edge rates higher in December […]
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