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Treasury&#39s ban on fees putting Cat loans at risk

Lenders, brokers and MPs have accused the Treasury of risking a mortgage

misbuying scandal by banning intermediaries from charging fees on

Cat-standard mortgages.

The Government claims the Cat improves borrower protection but the Council

of Mortgage Lenders is concerned that the take-up of Cat mortgages could be

restricted if brokers do not get a fee for advice.

Opposition MPs are warning that the decision will lead consumers to

believe the Government is effectively underwriting the products.

Brokers can still receive a procuration fee, which must be disclosed in

cash terms to the client, but brokers who charge for advice stand to lose


Cat-standard mortgages will not carry redemption charges and interest will

be calculated daily with no separate charges for mortgage income


Chase de Vere Mortgage Management managing director Simon Tyler says: “It

is difficult to understand how you can restrict people from paying for

advice on products. The Government seems to be making the climate right for

misbuying. If they are trying to protect people from third-party advice

they are going the right way about it.”

Aifa director general Paul Smee says: “It is a shame the Government failed

to make provision for advice. They do not understand the value of advice.”

LibDem finance spokesman Vincent Cable says: “The problem is people may

believe the Government is recommending or underwriting the mortgage

product. If brokers cannot charge for selling these products, this

reinforces my fears.”


Schroder prescribes medicine for new fund

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Setting standards to improve long-term insurance picture

Whether justified or not, the insurance industry is regarded with a degreeof caut ion and mistrust by many of our customers and this applies toproviders and intermediaries.Such mistrust is neither good for the consumer, whom it discourages frommaking the kind of financial provision they will need for the long term,nor for our businesses.We are all […]

AssureSoft plots route to IFAs&#39 door

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NU reveals planning gap

Norwich Union is warning company owners and directors they could be losingout if they continue to keep their pension and business planning separate.Research from NU shows that while the majority of owners and directors ofsmall to medium-sized companies have made provision for their retirement,only 1 per cent have done so through a director pension arrangement.NU […]


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