Brokers and lenders have come in for criticism for profiteering and failing to give proper advice on overseas mortgage applications.Overseas specialist broker Conti Financial Services managing director Simon Conn says some providers are guilty of serious abuses by advising consumers to remortgage and use the cash to buy abroad rather than take out a separate mortgage. He says some firms are even doubling as the estate agent to sell the property abroad with the money from the remortgage. He insists that advice is crucial when buying overseas because of different property and tax laws, political tensions and varying cultures can leave many consumers at risk. Conn says the extent of the problem is widespread. He says the sector needs regulation to stop non-advised sales but accepts it will be difficult to achieve full regulation worldwide. Own a Home Abroad director Phil Lockyer agrees with Conn that proper policing is required. Lockyer says: “People need to get more advice than they sometimes do. The problem is that the overseas property market is like the financial services industry 20 years ago before regulation. “There are a lot of people going about pretending to be someone that they are not. It will be very complicated to regulate them all.” Conn says: “You should not be able to provide the mortgage and sell the property if you are remortgaging in the UK. It is a lender problem as well as a broker problem.”
New Treasury Economic Secretary Ed Balls told the Treasury select committee this week that he is unsure about the future of basic advice and that changes are needed to ensure a better balance between simplicity and regulation.
Figures from the Association of Mutual Insurers show that, when a mutual life insurer becomes a plc, holders of with-profits policies get an average payout of 14,000 less than if the organisation had remained mutual.
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