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TSC member pushes for MMR requirement to discuss protection

Treasury select committee member Andy Love says amending the mortgage market review so protection products are discussed when someone takes out a mortgage could help close the protection gap.

Speaking in a Westminster Hall debate yesterday, Love said the protection market has collapsed in the wake of missold payment protection insurance and. He argued the Government needs to take action to address the resulting “protection gap”.

He cited research by Cuna Mutual which found 95 per cent of mortgages are sold without protection. Some brokers already use fact finds as a way into discussions about protection but there is no requirement to discuss it.

Love said: “With regard to the MMR, which sets the terms of the discussion between the customer and the lending institution, I am not aware that within the comprehensive discussion that is now required any room is given to insurance products to protect the loan.

“I would have thought that was one way in which the regulator could ensure that it is brought to the customer’s attention that they should get a protection policy, so that if things go wrong they can rest assured their loan will be insured.”


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. There’s certainly a desperate need for protection to get addressed in this context.

    But unfortunately, until the post MMR process can be made a lot more efficient, it’s just not going to happen. At this point, adding in a protection requirement (along with the fact getting protection is often not a very speedy application process) will just exacerbate the woeful log-jam problem we’ve got only a week or two in. Not to mention the fact that the new extended process is already a tedious enough customer experience if you ever do get an appointment in time.

    At this rate, the growing problem of folk having mortgages with no protection is being mitigated by people either losing out on the properties they wanted due to delays in the mortgage process or by just not being able to get a mortgage at all.

    #Behavioural economics fail at FCA

  2. Julian Stevens 7th May 2014 at 7:19 pm

    Who the hell are Cuna Mutual? Though I’m not a mortgage broker, I find it difficult to believe that as many as 95% of mortgages are sold without protection. If nothing else, protection represents an opportunity for an additional sale and who would blithely ignore that?

  3. Steven Pearman 7th May 2014 at 7:40 pm

    It staggers me just how clueless these people are. Protection was made unaffordable, as is fitness, eating, having children and a pension due to the overzealous rules impossed by the overlords at Budgie Cove.

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