Advisers and clients caught between a rock and a hard place
HLP, the Worthing-based network, which has recently moved to larger offices within the town, has 200 AR firms across the UK and was one of the few networks to announce a profit in 2009.
Chris Tanner commented: “Lenders are reporting higher levels of fraudulent applications as potential borrowers try to find ways to qualify for a mortgage at a time when lenders have pulled back from all self certification, high LTV and income multiple mortgages, adverse credit and those for the self employed without adequate accounts.
“Sadly, this has put advisers in the firing line. Lenders believing any broker to be instrumental in an attempt at manipulation or fraud, whether complicit or just naïve, will simply ban the broker from their panel and make a report to the FSA. For brokers working for a practice the ban can include the principal firm as well. If the broker is a member of a network, the results are just as severe because as most networks cannot establish the details behind the panel removal, they have to conduct a ‘random’ investigation and it is likely the broker will be terminated and not work again.”
He added “Apart from the obvious danger to advisers, the consequences for customers can produce outcomes which will have a potentially greater negative impact. If clients are unable to obtain a mortgage legitimately because they no longer qualify or cannot afford repayments, inevitably renting a property is usually more expensive than the monthly cost of a mortgage.
“On top of that there is no obligation or responsibility on letting agents to check that prospective tenants can afford the rental. So all we do is push the affordability problem away while not dealing with the issue.”