More needs to be done if recent FCA changes aimed at supporting mortgage prisoners are to gain traction within the intermediary market, Paul Donoghue, owner and CEO of Concept Financial Services, has warned.
The FCA has recently invited intermediaries from the wider market to help identify and support those that might be trapped on products with closed book lenders as well as provide additional support.
Research published in January of this year suggested that there were 170,000 borrowers that have active mortgages with closed book lenders or unregulated entities.
FCA calls for your input on ongoing support for borrowers
Donoghue said: “I very much welcome the regulators move to broaden the support available to mortgage prisoners, but I do feel that more needs to be done.
“In this post COVID world we now live in, we need to facilitate the conversion of expert mortgage advice into affordable mortgages with active lenders who have a deep understanding of modified affordability assessments.
“We have seen a number of lenders withdraw whole product ranges in recent weeks, and my concern is that the products that are made available to mortgage prisoners is ever decreasing.’
He added: “In the cases of mortgage prisoners, we really see the benefit of effective relationships between advice networks and lenders from across the UK.
“We rely on our positive relationships with these lenders to ensure we understand their approach when assessing affordability – but more needs to be done to ensure consistency across the market.
“We find that there are many people who believe that they are mortgage prisoners when in actual fact they aren’t – in many cases just assuming that they have no other option but to remain on a lender’s standard variable rate (SVR).
“I believe this is where the intermediary market comes in to its own and has a responsibility to work with lenders to ensure a real solution is progressed and delivered.”