Interest-only mis-selling rears its ugly head

Sarah Davidson

September 5, 2012

A spokeswoman from the Council of Mortgage Lenders said it had been working closely with members to look at the issue and establish the different types of borrowers who have interest-only mortgages.

She said: “We are encouraging our members to communicate regularly with their borrowers, who do not have adequate provisions in place to repay their mortgage, to help them back onto the path of a repayment mortgage.”

The statement comes after Jenkins told the Mail on Sunday that Barclays dedicates a lot of time to anticipating future complaints relating to issues including interest-only mortgages.

Jenkins told the Mail on Sunday: “We are trying to communicate frequently as these loans reach maturity and to help if a source of repayment for the loan hasn’t happened.”

Ray Boulger, senior technical director at John Charcol, described Jenkins’ comments as “quite amazing”.

He said: “He is throwing the door open for ambulance chasers to shift their focus to a new area of the market and you can expect cold calls to soar as they target interest-only customers.”

Barclays has subsequently backtracked on Jenkins’ original statement claiming the comments had been taken out of context.

A press office spokeswoman said there had been no suggestion that Barclays had mis-sold interest only mortgages, rather the industry as a whole and other banks have to work together to pre-empt customer complaints.

The Barclays spokeswoman said: “We regularly talk to customers about how they will repay their mortgages and are working alongside guidelines in the Mortgage Market Review to ensure that all interest-only mortgages are plausible and affordable to their customers.”

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