View more on these topics

NU defends its equity deals

Norwich Union has defended its equity release products following industry warnings that brokers could be in breach of the Mortgage Code if they recommend the deals.

In an open letter to the Mortgage Code Compliance Board, Simon Chalk, principal of Wetherby-based Mortgage Portfolio Services, asserts that NU&#39s equity release products go against the Mortgage Code&#39s level of service (a).

He asks: “Would an adviser remain compliant with the Code bearing in mind that with these plans a personal illustration detailing the precise penalties cannot be produced; if considering a remortgage, the penalties cannot be calculated until the actual date of redemption; and the interest rate at application will most likely not be the rate on which the advance is released?” Chalk tells Mortgage Strategy: “As the rate is calculated on the date of the advance what you pay for and what you get are different things. My concern is that brokers will get into trouble by recommending these deals.”

Chalk has also written to Safe Home Income Plans, the organisation dedicated to the promotion of safe equity release plans, asking it to review NU&#39s membership and pointing out that SHIP&#39s Code of Conduct states members should “provide fair, simple and complete presentation of their plans.”

The MCCB and SHIP have declined to comment.

But Paul Stokes, head of marketing at NU, says: “We always notify the client if the rate changes from the date of application, especially if rates go up. Over the past five years we&#39ve only repriced about five or six times. Our products are also not designed to be remortgaged.”

Stokes adds the products are in line with the Mortgage Code but will be re-assessed to meet FSA regulation.

Recommended

Top London brokerages form alliance

Top London brokerages Hamptons International Mortgages and Square Mile Mortgage Finance have formed a strategic alliance that will result in an aggregated annual loan delivery of over £1bn and annual revenues of £5m. Both brokerages service the top end of the market and they have a combined monthly distribution of £80m. Pundits say this formal […]

MT to offer one-stop shop

Mortgage Times is planning to take principal status and offer a one-stop solution to intermediaries, whether appointed representatives or directly authorised. The Mortgage Times network will have three levels of membership, offering access to a panel of 40 lenders. Option one will be for brokers who go for direct authorisation. MT says it will help […]

APS adds BuildStore to direct lending panel

APS Europe Mortgage Club has added BuildStore, provider of mortgage products to people wanting to renovate or convert their home, to its direct submission panel. Brokers will now be able to offer BuildLoan, a self-build mortgage for the intermediary market, to their clients and receive a procuration fee via APS Europe. The range of features, […]

Accord latest lender partner of Mortgage Brain

Accord Mortgages is to become the latest lender partner of mortgage sourcing provider Mortgage Brain. Lender partners have the opportunity to proactively verify key mortgage product features as displayed on the Mortgage Brain sourcing system, and it is the only system to offer this capability. Accord will begin to verify its products later this year, […]

Cricket - thumbnail

England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.

Newsletter

News and expert analysis straight to your inbox

Sign up