Northern Rock leaves broker in KFI Catch 22

A broker has been left in a Catch 22 situation after Northern Rock was unable to issue a compliant KFI for a further advance on a lifetime mortgage.

Chris Crane of Mortgage Check advised his client to take out a further advance of a lifetime mortgage after they ran out of money for home improvements. But NR was unable to issue this because it says it doesn’t have the facility to set up an additional KFI with brokers’ fees incorporated.

In a letter, the lender told Crane: “The KFI you have been sent by Northern Rock Direct is a direct only KFI produced by Northern Rock and is therefore not compliant for an introduced case where an intermediary is giving advice.”

It went on to say: “…there is no facility available to produce a compliant indirect KFI for an introduced case, only a direct case. Therefore it is not possible to provide your firm with a KFI, only the client.”

Crane adds: “I don’t want my advice to the client being undermined by someone at NR.”

NR says it is in the process of resolving the issue directly with the broker.