Home Property Finance & InvestmentMortgages As lenders report bumper profits, ‘borrowers are being thrown under the bus’

As lenders report bumper profits, ‘borrowers are being thrown under the bus’

by Seamus Doherty Property Reporter
29th Feb 24 8:25 am

Despite posting bumper profits, many lenders have once again started to remove products with just a few hours’ notice, which one broker has said is effectively “throwing borrowers under the bus”.

Newspage asked brokers if the practice of lenders pulling products with minimal notice is aligned with the principles of Consumer Duty? The conclusion of the majority is categorically not.

Riz Malik founder and director at R3 Mortgages, said, “It baffles me that lenders have once again started to reprice products with negligible notice periods, a practice that can see consumers pay much more for their mortgages.

“As countless lenders continue to report billions in profits, the practice of pulling products with little, if any notice, is throwing borrowers under the bus. It’s crucial to keep the customer’s interests in mind with every transaction, and withdrawing products at short notice should come to an end.

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“Once again, it is down to the broker community to defend their corner. Last year, a group of brokers under the banner of The Broker Collective initiated a campaign urging lenders to commit to a 24-hour notice period before discontinuing products, as the practice was rife. This movement gained swift support within the broker community, yet lenders still hesitated, often pointing to financial concerns. Such a minor concession should have a negligible effect on their overall business.

Stephen Perkins, managing director at Yellow Brick Mortgages said, “It certainly is hard to plead poverty for the inability to give notice on rate changes, whilst declaring huge profits in your published accounts.

“The argument that lenders cannot afford to give sufficient time, during working hours, for brokers to secure rates for clients before they are pulled is looking more like an excuse.

“Brokers working to midnight or having to rush applications in with an hour’s notice to ensure customers get the best deal is not helping brokers, and brokers make up 80%+ of lenders business volumes, so they should be supported more.

“Lenders pulling products with short notice is doing borrowers a huge disservice and is not acceptable.”

Katy Eaton, mortgage & protection specialist at Lifetime Wealth Management said, “Consumer Duty focuses on the customer journey and being treated fairly.

“How Coventry can give 48 hours’ notice, yet Virgin only manage three hours’ notice, is baffling, and the latter does not have the borrower in mind. That aside, the broker is being considered even less.

“Pulling rates at 8-10pm is after most advisers have finished for the day, so lenders then force brokers to choose between their client and family time.

“To see many lenders announcing strong profits is simply rubbing salt in the wound.”

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