Last year, we had heard the case of an unfortunate borrower. Let’s call him John.
John had young children and a good job. He wanted to move to an area with safer streets and better schools for his kids.
He used a broker to try and get a mortgage offer but was turned down by a mainstream lender. John needed a specialist provider if he wanted a mortgage.
But the broker did not have the appetite to deal with John and his family with their specialist lending requirements as they were too busy with their mainstream business.
The client was sent away with no guidance and believed there was no way he could be helped. It wasn’t just a loan to John but the future of his family.
By not showing him all the options, it changed the course of their lives. It sounds crazy, dramatic even, but it’s a very real issue that needs to be addressed.
This is not just about mortgages. Another example is a client with a broken chain. Unless a broker has the knowledge of the short-term lending market then the client may not be aware that there are solutions available to ensure they secure their dream home. Too many are unaware.
John is not unique. In 2016, there were 350 declines a day for the mortgage sector alone. The Council of Mortgage Lenders estimates there are £12bn in mortgage applications declined each year.
And that is just mortgages. It doesn’t include the thousands more across the specialist sector or those turned down before application.That’s a lot of crushed credit borrowers and a lot of broker business falling through the cracks.
The industry has a moral obligation to support consumers who are affected by declines when they have options elsewhere. It can change the course of people’s lives.
That is why Brightstar Financial is launching a campaign to help those borrowers crushed by the current credit markets. The majority of brokers are doing a fantastic job. It’s hard enough to get through your normal business but our experience is that there is still a significant minority that are closing the door unfairly on borrowers.
Banks are no saints either and often too keen to shut out decent borrowers because they don’t have the time or inclination to provide or refer to specialist solutions. It must change. More people have specialist circumstances than ever before.
The number of self-employed Britons has rocketed from 3.8 million in 2008 to 4.6 million in 2015. Today, more Britons are on zero hours’ contracts, work part time or are paid bonuses and commissions rather than fixed salaries.
There has been a 26% growth in the number of workers over 65 and they are requiring loans more than ever.These people may not fit into a mainstream lending box.
Instead of turning clients away because of time pressure or lack of knowledge, Brightstar wants to remind brokers that you can call on the expertise of a specialist or even pass the case over on a referral basis. You’ll get paid, even if you just pass across a name and number.
Brightstar’s campaign will also petition for smarter regulation of advice via the FCA and the Treasury to ensure borrowers are fully informed and supported. FCA regulation does not go far enough in expanding mortgage advice across all finance options.