The problem lies with both mortgage brokers and lenders
(PRWEB UK) 6 October 2012
Financial claims expert Michael Jordan of Credit Claims says that banks and other mortgage lenders could be faced with a barrage of claims for giving unsuitable mortgage advice. This follows recent scandals involving ppi claims and mis sold investments, which have resulted in the banks paying out billions of pounds in compensation, according to figures from the Financial Services Authority.
`The problem goes back over many years before the credit crunch in 2007. The banks did not really probe customers on how they would repay their mortgages on maturity, with many simply accepting the customers response that they would sell their house in the future and downsize` says Michael Jordan.
With house prices falling and reducing equity in peoples homes, the option of selling and downsizing is only available to around 19 per cent of borrowers, according to the Financial Conduct Authority. It is estimated that around *60,000 interest only mortgages will mature every year for the next 10 years. This could create a huge problem for mortgage lenders who will want to see their capital repaid but with the customer having no means to do so. Those aged around *60 make up half of these customers meaning many approaching retirement face a potentially bleak future.
`The problem lies with both mortgage brokers and lenders. Both have a duty of care towards their clients and the question arises, did they really give their customers sound financial advice by offering them interest only mortgages without properly investigating how they would pay off the capital? After recent scandals with mis sold payment protection insurance and big fines imposed for investment claims, the banks face the prospect of something even bigger`
About The Company
Credit Claims Ltd was established in 2008 by a team of former bankers to help those unfairly treated by their banks and other financial institutions. The company specialises in helping people get compensation for ppi claims, mis sold investments and mis sold mortgages. Its success has been recognised with awards at the Bolton and Bury Business Awards in 2011 and 2012 in the category of Customer Excellence.