Chris Bramham, Director of Specialist First Charge Lending at Brightstar Financial, is urging the government to step in to help alleviate the issues caused by the way that some lenders are treating existing customers by not adopting the transitional rules set out expressly for the purpose by the FCA, when dealing with clients who are not borrowing extra funds.
He said, ” I have been very vocal on this topic for some time. At Brightstar, we are getting an increasingly large number of enquiries from advisers whose clients have been trapped in this way. They have been unable to access the better rates offered by their lenders or remortgage because lenders are still refusing to adopt the transitional rules, which allow them to suspend the MMR inspired affordability calculations for existing borrowers.”
Chris added, ” It is good that Parliament is taking an interest through the recent intervention of Howard Flight in the House of Lords. The FCA is on record as saying that lenders have not made proper use of the transitional rules, but that message is not being heeded. Lenders clearly think that in any retrospective review, the FCA might not take the transitional rules into account, which can be the only conclusion to be drawn. This suggests a fundamental breakdown of communication between the regulated and the regulator.
All mortgage holders deserve to be treated fairly and in this case, that is definitely not the case. If the FCA is not willing to go further and bring weight to bear on lenders, then government will have to step in and act. It won’t be before time.”