Abbey for Intermediaries brands mortgage brokers high risk
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Abbey for Intermediaries has been accused of biting the hand that feeds it after it emerged that mortgage brokers are on its list of “high-risk” jobs when assessing self-employed mortgage applications.
The lender would not confirm how long brokers have been on the list which it says is reviewed regularly. Other jobs on the list include professional actors, dancers, sportspeople, car salesmen, property developers and bankers.
The company will no longer accept accountants’ certificates for what it deems to be high-risk jobs and now only accepts the last three years of accounts, or two years if a firm has only been trading for two years.
A spokeswoman says: “We regularly review and update our lending criteria to ensure we are lending responsibly and that borrowers are not overstretching themselves.
“In the current economic climate, there will clearly be some occupations that are deemed higher risk than others and, as a responsible lender, we may employ more robust underwriting when lending to such self-employed borrowers if we believe this is necessary.”
Savills Private Finance managing director Mark Harris says: “It is a sad sign of the times that the hand that feeds them is on the list. It does not bode well for the future of our sector if an intermediary-focused lender has not got a great deal of confidence in individual mortgage brokers.”
Chadney Bulgin mortgage partner Jonathan Clarke says: “It is shocking there is a list and it is a bit insulting that we are on it.”
Email Mortgages chief executive Michael White says: “It is frustrating to have to bow to these constraints which seem to have no logic. You cannot just say that a person is high-risk because of what they do, there is a whole range of factors.”
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Readers' comments (19)
Simon Webster | 18 Nov 2010 9:42 am
Given the conduct of a small but signifianct number of our colleagues can any of us really be surprised? Brokers know how to play the system and some of them have played it to their own advantage. Further as business levels have been slashed as a result of the recession many mortgage only brokers have been "feeling the pinch".
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Richard Wilson | 18 Nov 2010 9:53 am
I fail to see why this is a problem.
The honest amongst us have nothing to fear from this.
Or are there more less honest amongst us.
Be afraid. Be very afraid that you may get caught out if you fit into the latter category.
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Mark Watkins | 18 Nov 2010 9:53 am
So what? It's true. Whats wrong with providing 3 years accounts? I agree with what they say & I am a mortgage broker!
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JB | 18 Nov 2010 9:54 am
Im obviously missing something - what is all the moaning about? This is not an anti broker move, it is a sensible business process. Mortgage business is down dramatically and therefore mortgage brokers' income will be down. Given the scams that a small number of brokers have got involved in, why wouldn't a lender want to make sure?
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Brendan C | 18 Nov 2010 10:01 am
The article obviously went right over the first 2 peoples heads
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BG | 18 Nov 2010 10:03 am
I have no issue with it after all if you are lending money you would want to be sure the ability to repay is secure and likely to continue and mortgage brokers have suffered at least as much as any other profession...my one issue would be surely employed mortgage advisers must be on the list too? They could lose their job quicker and must be as high risk
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Anonymous | 18 Nov 2010 10:12 am
Many years ago when regulated by MCCB and fees were only £500 year. Lenders required 3 months payslips for employed & 3 yrs accounts for S/Employed. Whats wrong in providing the same now.
Bring back the MCCB
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Anonymous | 18 Nov 2010 10:18 am
I am directly authorised by the FSA and have been since 2002, over the last three years my income has dropped by half, this is the right thing to do!
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Anonymous | 18 Nov 2010 10:26 am
My god, when you think what those crooks at the banks have been upto. Selling PPI even when clients did not know they had been sold it. How much did Alliance and Leicester get fined for mis-selling PPI !!!. They should look at themeslves before placing judgement on the mortgage broker!!!
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Chris | 18 Nov 2010 10:43 am
There is obviously a mixed view on this. I would say that there is nothing wrong in providing 3 years accounts and a mortgage being based on those accounts. Most lenders seam to take the last year as the working figure anyway. Nothing has changed, if you are a full status client then these have always been the rules. Also we are three years into this down turn in mortgage business which will be reflected in the accounts, so no one is going to be lending against a set of figures that are not representative of what they are earning now. From my own experience I would say our incomes have bottomed out and we are on the up turn because we have diversified and created other income streams which may have taken some time to develop but are now reaping rewards. This is what sets us appart from other industries, we are a resourseful bunch. What I do strongly object to is the fact that we have been put on this list and we are classed and looked upon in the same breath as actors, dancers, car salesman and property developers, actors and dancers don't know from one day to the next what work they have and can not control it, they sit on the phone and wait fro the call. I thought we were professionals. That’s what the FSA keep telling me, and that’s why we have to be so highly trained and pay huge fees to be “in the club”. It would seam we are not professional advisers, we are salesmen who don’t know where the next piece of business is coming from. It would also imply that Santander feel that there will be even less mortgage business written in the future, because if our incomes are directly linked to mortgage volume of which we send a proportion to them (or we used to, because I certainly will not be sending them any business in future) then for them to be worried about our income they must be even more worried about their own. This is another Bank of Ireland moment. Who earlier in the year wanted brokers to take out their office insurance plan that they designed for brokers and this came at the same time of them supporting their mortgage proposition to the Post Office at the expense of Brokers. I am sick and tired of being shafted from within my own industry. It doesn’t happen anywhere else
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