Which? magazine is accusing mortgage advisers of flagrant disregard for the MCCB code of practice after an undercover probe found only three out of 39 advisers gave acceptable advice.
It claims that two out of three brokers failed to explain properly how mortgages could be repaid and nearly half gave misleading information.
Seven of the 39 did not mention the Mortgage Code Compliance Board's voluntary code of practice. Some advisers at high-street firms, such as Abbey, Halifax, HSBC, Lloyds TSB, NatWest, Nationwide and Northern Rock, did not make it clear that they can only recommend their own companies' mortgages.
Which? editor Malcolm Coles says he does not expect regulation of mortgages and general insurance to improve the situation. He says: “Some of the bad advice was down to inexperience and poor training or advisers being more concerned about selling protection insurance that pays bigger commission than mortgage advice. Regulation will not solve these problems although it should mean advisers become more accountable.”
London & Country mortgage broker David Hollingworth says: “Most firms are tightening up training in the run-up to FSA regulation but the results from the survey seem to suggest that some firms are failing on very basic areas of mortgage advice and that is very distressing.”