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Simpler application forms will make everyone happier

I was interested to see the news that Nationwide is going to send back incomplete application forms. On the face of it that is fair enough, it is important that brokers provide lenders with sufficient information so that they can make a good credit decision.

But how many of these lenders’ management teams have had to complete one of their own forms? The same information is requested several times in different places and some information is not asked for at all, but you must remember to put it in the ’other information’ box or else.

Some parts of the form are wastelands of paper and others don’t have enough room to enter the required information.

Nationwide’s is one of the poorer paper forms. Its main use is for porting clients yet there is nowhere you can tell it the different rates and amounts required.

Online forms are just as frustrating. How many different ways can you enter a date? About a dozen or so, judging by the systems out there, and that goes for all manner of things, from where the progress button is to how many boxes the postcode goes in.

I would suggest a common application form but I think that was tried many years ago and it was longer than the Old Testament

It sometimes feels like lenders are trying to find ways to make their application different or more complicated.

I would suggest a common application form but I think that was tried many years ago and it was longer than the Old Testament.

We need some common sense from lenders. To all lenders reading this, if you help us to help you we will all have successful, Treating Customers Fairly-friendly applicants, applications and happy mortgage customers.

Mark Nuttall, Senior financial planning consultant, West Midlands Mortgage Centre

Nationwide is only major lender still using paper forms

So Nationwide is going to send back poorly completed paper applications. Surely the point is that we are rubbish at completing paper applications as we don’t have to do them anymore?

Nationwide is the only major lender which requires a paper application. It only moved porting online last year.

Dare I suggest that even Noah would be booking his pairs of passengers online these days.

Simon Collis, Mortgage consultant

 

Clarifying the facts on interest-only and repayment problems

In his article in the last issue of Mortgage Strategy, Stephen Lowe, group external affairs director at Just Retirement, made the point that while killing off interest-only for standard borrowers may be a good policy to head off trouble in the future, it would not deal with the problems of the present.

No doubt there will be some people who won’t be able or won’t want to pay off their interest-only loan. But the number who have little or no equity and therefore virtually no choice is few.

Figures from the Council of Mortgage Lenders show that there are around 3.9 million outstanding interest-only mortgages.

Of these, two-thirds are set to mature after 2020. With at least eight years to go the majority of these borrowers have time to put in place some sort of repayment plan if one doesn’t exist already – though they must get on with it and not bury their heads in the sand.

In the meantime, the number of interest-only mortgages set to mature each year until 2020 is between 131,000 and 158,000 a year – a drop in the ocean compared with the 7.3 million capital and interest mortgages held by consumers.

These interest-only loans scheduled to mature in the next few years are, on average, small compared with the value of the property.

The CML says that for loans maturing over the next three years, over half have an equity stake of more than 70% of the property’s value, and a further third have a stake of more than 45% of the property value.

The average interest-only loan due for repayment this year is £59,000. Clearly where there is plenty of equity in a property the lenders need not worry about losing money and can afford to make concessions.

But there is a potential problem. The CML estimates that there are 6,000 interest-only mortgages – just 1% of all interest-only loans due to mature over that time – with less than 10% equity.

These are likely to be relatively new loans, often given to first-time buyers to make repayments affordable, which were taken out on a short-term interest-only basis. These borrowers may have plenty of time to switch to a repayment loan – provided they can afford to do so.

Lorna Bourke

 

I doubt claims firms are qualified to make mis-selling decisions

I was interested to read recently that the the Financial Services Authority is backing the Which? and MoneySavingExpert.com campaign against claims firms.

The consumer organisations have launched a marketing campaign against unscrupulous claims firms that charge consumers a fee without telling them there is a free alternative.

It’s about time these firms were taken to task. I have had a number of claims against me and have never sold any payment protection insurance. I wrote a small number of monthly accident, sickness and unemployment policies in the past and they are even trying to claim against those.

What really annoys me is that they even state that I am not allowed to contact my own clients.

One question I must ask is this – if I send a copy of my fact-find, insurance demands and needs statement, application and so forth for an ASU policy, what qualifications do these people have to be able to look at the documentation and decide if the client was mis-sold or otherwise?

Dave

Sadly, claims firms are often run by mortgage brokers

In response to Dave’s comment on Mortgage Strategy Online, these claims companies are sadly often run by mortgage brokers, which means they know the selling rules.

Just Google the concerned claims company to see who runs it and then check the names on the FSA register – and I bet you will find some matches.

Tell the company you are forwarding all its letters to the Ministry of Justice as you believe the case is spurious or fraudulent and open a dialogue with your customer to determine whether the claim is genuine, and if so how they would like to resolve it.

Do not be bullied by these people. Then also report these individuals to the FSA and their networks if they are registered.

Roger

 

Lazy company sent information request to wrong business

I received a request for information from a claims company recently for a person who lives 120 miles away and who had named the firm to be claimed against whose name was different from mine by one word.

The company had done an FSA database search and selected the nearest name, which was mine. I have rung the firm in question and told it I am not the company in question and shredded the cheque.

I expressed my displeasure on the phone, as it clearly didn’t do its homework properly. The firm it should have sent the request to had its FSA permissions cancelled in 2010 for mis-selling general insurance via misleading marketing.

These firms are fuelling the claim process by throwing a lot of mud to get some to stick.

Richard Scott

 

Clever move that can help you deal with ambulance chasers

After dealing with a series of complaints about the supposed mis-selling of PPI policies that did not exist or failing to comply with FSA rules which only came into force years after the supposed mis-sale, I have found ammunition to hit back at these firms.

The Ministry of Justice issued a bulletin to claims firms in February which can be found at www.justice.gov.uk/downloads/ claims-regulation/ cmr-bulletin-feb-2012.pdf.

It tells claims firms to follow guidance issued by the Financial Ombudsman Service at www.financial-ombudsman.org.uk/publications/technical_notes/ ppi/ppi-CWletterC.pdf.

That guidance in turn requires claims firms to have completed the payment protection insurance consumer questionnaire as fully as possible and sent it to the financial business to help it assess the complaint. In other words the FOS PPI questionnaire should be sent with the complaint.

The MOJ also says that “we fully support the guidance issued and will be checking compliance”.

So now my first move when I get a complaint from an ambulance chaser without the questionnaire is to send it an email asking why it has not complied with the MOJ’s instructions and copying it to business@claims.gov.uk.

Peter Turner

Lloyds group cutting its market share is not earth shattering

Lloyds Banking Group is looking to reduce its share of the mortgage market from 28% to 25%.

Such a cut is hardly earth shattering. Assuming we have a £120bn market this year, in real terms that amounts to a fall of £3.6bn. If you assume an average loan size of £150,000 it equates to 24,000 mortgages.

Halifax isn’t really playing at the moment anyway apart from in buy-to-let, but seeing as that’s such a cash cow I don’t think the reduction will come from there.

Colin

 

The industry is on its knees and FCA boss wants to get stricter

I was interested to read the comments by Martin Wheatley, chief executive designate of the new Financial Conduct Authority, that his new organisation will be stricter than the FSA.

Why doesn’t he just ban all mortgages and financial transactions to show how hard he is? As it is, the Mortgage Market Review has brought the market to its knees and it hasn’t even been implemented yet.

Bobby

 

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