FCA slams lenders for lack of common sense
Speaking at the Council of Mortgage Lenders annual conference in London today, she admitted she was disappointed that some lenders are going above and beyond FCA requirements.
She said: “It is disappointing that some lenders are not applying the rules the way we expected.
“Instead some lenders are applying strict affordability tests when the rules don’t require them to do so and this results in existing customers who are not looking to increase their debt being unable to switch to new deal.”
Woodall has seen cases of customers being refused a cheaper product having paid higher monthly repayments, and she added “this isn’t common sense, so I question that firms are truly thinking about customers’ best interests.
“I would urge you when faced with such situations to ask yourself if refusing this change is a good outcome for this consumer.
“Would they be better or worse off if we allow them to downsize or move to a better deal without borrowing more?”
She also addressed interest-only mortgages, which she said “is a perfectly sensible option for some consumers, but using interest-only affordability and hoping things turn out okay isn’t sensible”.
According to Woodall borrowers on such deals should contact their lender to find a solution before their deal runs out.