A broker who asked not to be named contacted Mortgage Strategy last week to complain about a problem they had encountered while attempting to port a client’s First Active mortgage across to a new property.
First Active’s products are classified as being portable on sourcing systems. But the broker found that rather than porting a mortgage to a new property on a borrower’s existing rate, deals are ported to one of the lender’s latest range.
A spokesman for Royal Bank of Scotland, which owns First Active, says: “It’s down to how you define portable. If a broker wants to move a loan, a new product can be chosen, the redemption fee is waived and the broker receives a proc fee once again.
“And choosing a new deal may mean customers could get better rates than before.”
Ray Boulger, senior technical manager at John Charcol, has also had problems in the past with the portability of First Active’s range, and says portable is the wrong label to attach to the products.
He says: “The Key Facts Illustrations on First Active products are definitely misleading when it comes to portability.
“First Active says the ported mortgage has to be taken out of the present range, which isn’t porting. The lender has recently raised its rates so clients who move would get worse deals.
“We recently had trouble with the portability of a First Active mortgage and had to take action to the highest level at RBS. It was finally resolved, and RBS acknowledged the issue. It admitted there is a problem with its systems and said it will amend this in the second half of 2007.
“Until then, I advise brokers to take issues up with RBS, as it conceded it was in the wrong in our case.”
RBS would not comment on whether it will be making changes to its portability system.