Borrowers risk waiving rights through product transfers
Millions of borrowers are at risk of waiving their right to full personal liability protection if they switch mortgage through a product transfer, TMA director David Copland has warned.
Remortgaging approvals were 15% higher in the first nine months of 2016 than in the same period last year with more lenders contacting clients to transfer their current mortgage to a new product before their current deal ends.
The industry, worth an estimated £80bn a year, is believed to have sky rocketed since the implementation of the Mortgage Market Review.
Product transfers are not recorded as separate to remortgaging transactions, making it difficult to assess how often they take place.
By instigating the sale without professional advice, the levels of personal liability are significantly increased for borrowers due to the loss of the full financial ombudsman service protection covering the provision of advice.
David Copland, director of TMA mortgage club, said: “The risks of this continuing unreported are extremely concerning.
“Although we know that this market is increasing, we don’t know by how much and how fast it is growing. However, it is clear millions of people are at real risk of switching to a mortgage which isn’t right for them and the financial implications of this could be irreversible for the individual and their family.
“If this market is not made more transparent, the underlying strength of the UK mortgage market could be in for a major shock.”