Money: Farewell to the dodgy home loans

Shocking news from the property world: 95 per cent of mortgage brokers are breaking the rules of the game. A huge undercover shopping exercise by trading standards offices around the country found almost every broker was flouting the voluntary Mortgage Code in one or more ways. A breathtakingly hopeless result.

The Mortgage Code is the set of rules that is supposed to protect us from being ripped off or sold an unsuitable deal when we shop for a home loan. But more than three in 10 of the brokers visited didn't tell shoppers whether they were selling for one firm or giving an independent choice of deals.

People under pressure to use mortgage brokers att-ached to firms of estate agents should take special care. Agents in overheated property markets are sometimes quite blatant in suggesting they may favour your offer over someone else's if you get your loan from their man.

Mortgages are the last big plank of most people's financial plans to remain outside the legal protection of the official regulators. So if it all goes horribly wrong and you are sold an unsuitable and expensive fixed-rate, interest-only endow- ment with a hefty redemption penalty and compulsory insurances - tough.

You can start to unravel the problems through arbitration or an ombudsman scheme, but first you have to realise you are in a dud deal (which is hard enough when many mortgages are fiendishly complex). So wouldn't it be easier to feel warm and well protected before you sign up for a loan that may run into six figures and take most of your working life to repay?

The new Financial Services Authority (FSA) has an independent consumer panel providing a lobbying voice. It has not hesitated to recommend bringing mortgages into line with investments and regulating every aspect of their sale under the law. The Government is expecting to rule on the issue later this year.

I can't imagine there are many bets being laid on the Mortgage Code surviving much into the next millennium. It apparently has as many teeth as an ancient moggy.

A few voices in the mortgage industry still say it's too expensive and too complicated to give mortgage sales a proper legal framework. They point to existing rules which, put together, cover most aspects of buying a mortgage (endowments and other investments sold as mortgage repayment vehicles are protected under the law). The flaw is that you need a degree in pedantry to work out which bits of the sales process are covered by which laws. And where the hell do you go to complain?

Bringing everything to-gether under one roof at the FSA's new offices makes absolute sense.

The undercover shopping survey visited 166 offices, and a disheartening 40 per cent of these failed to offer "balanced and unbiased" mortgage information.

Sadly for the many dodgy mortgage brokers who will undoubtedly be driven out of business by tighter regulation, the bottom also seems to have fallen out of the used car market.

n i.berwick@independent.co.uk

PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Manager - SAS - Data Warehouse - Banking

£350 - £365 per day: Orgtel: Manager, SAS, Data Warehouse, Banking, Bristol - ...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer
 SQL, C#, VBA, Linux, SQL Se...

.NET Developer

£650 per day: Harrington Starr: C#.NET Developer ASP.Net, C#.net, WCF, WPF, .N...

Planning Manager (Training, Learning and Development) - London

£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment