A claims management company was warned other claims firms not to chase mortgage brokers over misselling cases, saying ultimate responsibility for signing off a loan lies with the lender.
Lask week, Money Marketing’s sister title Mortgage Strategy revealed claims firm Money Boomerang is running a TV campaign targeting brokers who have allegedly missold a mortgage. The campaign launched on Monday.
Commercial Remedies Group, which operates a processing centre for other CMCs to determine the legitimacy of complaints, says lenders are responsible for missold mortgages.
Director and former sub-prime mortgage broker Simon Helliwell says: “It is no good claiming on a misselling principle. It is the lender who is held accountable on the basis of negligence because it is the underwriter who signs it off at the end of the day. It is extremely hard to prove a mortgage was missold.”
Helliwell estimates that with around eight million mortgages completed in the UK over the last 10 years, missold mortgages could potentially be more lucrative than PPI.
Association of Mortgage Intermediaries’ chairman Pat Bunton says intermediary firms will be hurt more than lenders by a rise in claims, even if they can prove their innocence.
He says: “What is wrong in all of this is that intermediary firms, even if they are able to answer and defend themselves, will still get charged £500 per case above the FOS free case threshold.
There will be many cases of entirely innocent intermediary firms who are left picking up the tab for completely speculative punts. It is about time CMCs are held to account for some of these actions.”
Emba group sales and marketing director Mike Fitzgerald says: “Lenders were and are responsible for the products they designed and sold. Brokers are only the conduit. Claims firms will find that mortgages will be tougher to make money out of than PPI as it is harder to prove misselling.”