Miranda Khadr, associate partner at St. James’s Place, has called for a more open system as consumers are often bound by the underwriting that is done by lenders. Due to this, Khadr claimed, borrowers are finding ways to manipulate the system.
Khadr claimed that further problems are also caused by the ‘Treating Customers Fairly’ initiative, as there is not enough flexibility with the mortgage deals and with an interest only mortgage, for example. Khadr said: “Lenders are not asking the right questions when it comes to applications. I did an application for a person on £150,000, who could get more options as a first-time buyer than with his wife as lenders are more willing to loan on that basis. This strict criteria is causing problems.
“If underwriting was done properly, there would not be so many repossessions. Some clients are just not catered for. Often it is a case of ‘computer says yes/no’ and it should not be done that way. Brokers are looking at the options that are presented and work with them. If there was more choice, they would be better off.”
Paul Suchet, managing director at Money Plus, said: “It is much too easy to get a mortgage as there are so many products and lenders to choose from. The people that this firm deals with don’t do mortgages, so their opinions are not relevant.”
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