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BRIGHTSTAR FINANCIAL WRITES TO HOUSING MINISTER TO RAISE AWARENESS OF ‘CREDIT CRUSHED’ BORROWERS

By Michelle Westley

Brightstar Financial is today raising its concerns for the ‘Credit Crushed’ with the housing minister Gavin Barwell.

Last month, Brightstar which is on course to hit £1bn of annual specialist lending completions in 2017, launched a campaign to shine a spotlight on ‘Credit Crushed’ borrowers.

They are borrowers who are turned down for mainstream deals, or have complicated requirements but are not made aware of the specialist options available to them meaning they don’t get the finance they need and the impact of this can have life changing consequences.

In December, the FCA unveiled the terms of reference for its market study into the mortgage market with an interim report published in the summer and final report in 2018.

The study is the perfect time to have a national debate among MPs, ministers, industry and the public on the impact of mortgage regulation and the role of financial advice for property.

The FCA study is focused on ensuring consumers have the right tools, guidance and advice to access appropriate first charge mortgages.

This is welcome to address issues created in pockets of the market such as over-40s borrowing, the self-employed or those with irregular incomes but it is too narrowly focused on first charge mortgages. And, especially, borrowers who have been declined and feel they have nowhere to turn.

Here is our letter:

Concern about credit crushed borrowers

Dear Mr Barwell,

“We are writing to raise concerns over the role of Credit Crushed borrowers in today’s property finance market.

“Borrowers are consistently disenfranchised from the specialist lending market, across all sectors and at each part in the advice chain. The reasons are varied.

“They are borrowers who are turned down for mainstream deals, or have complicated requirements but are not made aware of the specialist options available to them.

“This means they don’t get the finance they need and the impact of this can have life changing consequences. It is an information gap.

“The impact can be devastating and can change the course of a person’s life. There is a moral obligation to make consumers aware of what is available to them, whether or not the advice giver wishes to advise on such cases.

“In December the FCA published its market study into first charge mortgages with the aim of improving the consumer experience. This is welcome but it does not go far enough.

“As the FCA has noted, it has caused problems by creating disincentives for brokers and providers to offer more complex deals.

“The study should look beyond first charge mortgages and to take a holistic view of the property finance market.

“This can affect thousands of borrowers through no fault of their own. It is time for MPs, regulators, industry and the public to discuss solutions and expand information, guidance and advice to all borrowers who need it.

“Borrowers should be made fully aware of the options available to them.”

Brightstar wants to remind brokers that, instead of turning these ‘Crushed Credit’ clients away, call on the expertise of a specialist and use them to assist you through the application process, or indeed pass the case over on a referral basis. Brokers will be appropriately remunerated as well as helping more clients, even for referring a name and number.