Which? exposes incompetent mortgage advice

| July 23, 2008 | 0 Comments
Which? exposes incompetent mortgage advice

Which? has been investigating competency among mortgage advisers and has found that many are omitting to check information on clients’ abilities to meet repayments.

The consumer group sent its researchers to gather advice from banks, estate agents and independent mortgage advisers.

Acting as first-time buyers, they visited 24 banks, 13 estate agents and 13 independent mortgage advisers in England and Scotland, between February and April this year.

The survey found that only four of the 50 advisers visited provided acceptable advice.

Forty-one failed to provide one or more pieces of key information and 35 did not check that the enquirer could afford the loan.

The failures included advisers omitting to say if their services involved giving advice as well as information, not providing an initial disclosure document, and not providing clients with a key facts illustration.

In addition, the majority of advisers attempted to sell insurance while giving mortgage advice.

Many were offering an unsuitable product having omitted to tailor their advice to the needs of the client.

Which? editor, Martyn Hocking, says that many advisers adopt a blanket, rather than an individual, approach to selling mortgages and appear to be very interest in selling an insurance policy at the same time.

Mr Hocking is reminding consumers that there are over 3,000 mortgage products available and choosing the least competitive loan can cost thousands of pounds a year.

Last year, similar research by the Financial Services Authority found that only one-third of mortgage advisory firms could provide evidence of giving customers suitable advice and yesterday, the regulator announced that it is cracking down on mortgage fraud, having already banned 17 brokers in the past 12 months.

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