An open letter to all mortgage lenders

Dear Mortgage Lender

Highly-ethical, morally responsible policy seeks like-minded lender.

I am becoming increasingly concerned about the apathy that appears to be rife within the mortgage sector for bringing new products to market to reduce the ever-increasing protection gap now faced by consumers.

Borrowers can be forgiven for their cynicism about mortgage insurance, after all they’ve witnessed the long-running PPI mis-selling debacle and any doubts over their cover paying out are being exacerbated by claims management companies who constantly vilify the British banking industry.

But can the same level of forgiveness be extended to you the lender?

I understand why you are disillusioned and no longer have the appetite to offer these types of policies, but is doing nothing the right option?

Customers taking out a mortgage or remortgaging their property must be offered a financial support mechanism that will cover their payments should they lose their job or become unable to work. Is it morally right to leave them to fend for themselves, reliant on family, friends, savings, meagre State benefits or even worse, payday lenders to get them through? And if you do provide mortgage insurance, is it morally right to offer traditional cover that has a reputation for exclusions and claims’ rejections?

Either way, your actions are jeopardising the financial well-being of your borrowers and helping to erode the credibility of your sector, at a time when it urgently needs rehabilitating. Now is the time to take the initiative and offer innovative, lucrative and risk-free policies that will enhance your reputation and reduce the risk of repossessions. Isn’t this a win, win scenario for lender and customer?

In a bid to facilitate this much-needed step-change in attitudes, I’ve developed such a policy. It’s highly ethical, morally responsible and cost-effective; all I need now is a like-minded lender to share it with.

If you’re appalled at the rumours the Government is planning to claw back interest payments made to claimants under its Support for Mortgage Interest Scheme when they sell their home or die, turning it into a loan rather than a benefit, we may well have a future together. For the sake of the industry’s reputation and your borrowers’ home security, I certainly hope so.

Yours faithfully,

Alexander Burgess MBA,

Director, British Money Limited