Who’d Be a Mortgage Broker?

It’s a serious question, I read an article today that left me bereft as to why anyone would begin to consider this career choice if they knew what a battering they would take on a yearly basis from lenders and regulators on an annual basis.

Here is that article http://www.moneymarketing.co.uk/2006554.article?cmpid=pmalert_133747

The article, from the respected Money Marketing journal states that since 2010 “Lenders have kicked at least 676 mortgage broker firms off their panels over the past four years.”

You could take the view that this is an overdue purge of the industry whereby rogue brokers are being rooted out by lenders. This of course is to be welcomed with open arms, the secured loan industry would of course benefit from this sweep also. However scrape the veneer of the story away and speak to a mortgage broker and some of the reasons  “where major lenders have refused to give the broker removed from a panel a reason for their exclusion or a chance to appeal the decision”  are tenuous at best.

Last week I was discussing a case with one of our long standing introducer partners, he was decrying a high street bank that had terminated the agency of a friend, also involved in the mortgage market.

The reason for the termination? He had written a  buy to let mortgage for a client, who had subsequently, the bank discovered, moved into the property and was using it as a residence. When was the mortgage written? 5 years before their investigation! Can he appeal? Not a chance.

In the defence of mortgage mortgage brokers, yes they ought to take reasonable precautions and safety checks, but surely that doesn’t extend to clairvoyant gazing into crystal balls in order to monitor the clients’ future behaviour? How can a mortgage broker be liable for a customers’ actions AFTER they have left their duty of care?

Crystal-Ball-Finance-The-Art-Of-Predicting-Housing-Market-place-Trends-2626

Only this week, an introducer approached us to do a second charge on a Buy To Let mortgage he had written for Barclays 10 years before, lo and behold one look at the voters roll showing the customers having lived there for 5 years and a compliance issue arises.

Thankfully a quick heads up to the introducer and we were able to point him in the direction of reverting the mortgage to a standard resi with capital raised on another Buy To let. Did the customers knowingly commit mortgage fraud? I have absolutely no doubt it was a genuine mistake, could it have cost the broker an agency? Judging by previous evidence there is every chance it could have.

What I take from this, is that the market is very nervous, the floor is shifting under mortgage brokers and extra precaution needs taking with each customer. The MCOB review will ensure that the secured loan market has to be embraced which is a good thing for Charles Frank Finance, I cannot hide that. For the bewildered mortgage broker, the positive is that your customers will need to be monitored regularly, allowing for greater earning potential, staying in touch with old customers to ensure that they are obeying the terms of their mortgage may well seem like over kill, but opportunities for re-mortgages and seconds will be the offshoot.

Who’d be a mortgage broker?

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