Mortgage prisoners deserve better
He is flabbergasted by the timing of the announcement, as it coincided with the end of parliament and the start of the general election, meaning there are no politicians to raise questions on the subject.
And he is disappointed with the industry for failing to lobby for a reinstatement of transitional rules past March news year.
Wood said: “I find it an extraordinary decision. The raft of regulation under MMR was specifically designed to keep the interests of customers foremost.
“The blinkered desire for an all encompassing European compliance agenda will be the cause of actual and real hardship and store up problems for the future.
“The FCA had carefully put in the transitional rules arrangements, which meant that existing borrowers would not be at a disadvantage from the new affordability rules when their current deals ran out, or they wanted to remortgage, and yet our European lawmakers have seen fit to torpedo this.
“While I am sure the FCA has been protesting strongly about the decision (or at least I hope they have), I am particularly concerned that in the rush to have conformity across the EU, our much more sophisticated lending market is going to be saddled with a decision which makes no concession to common sense and engenders very real customer detriment.”
Wood is concerned that lenders have little reason to treat existing borrowers fairly, as they will be locked out of the remortgage market.
He added: “While I am sure there will be no conscious intent to take advantage of what has become a captive audience, by the same token, there is also no incentive to help them and they are open to abuse even if it is by neglect.
“We need to remember that interest rates are not going to stay this low forever and if interest rates start to go up then those on SVR’s are going to suffer.”
Wood hopes the FCA lobbies for an exemption, even at this late stage.
He said: “I would be aghast if we just simply accept this as a fait accompli.
“Unfortunately, there is no incentive for the larger lenders to raise their voices on the topic, but there is nothing stopping the intermediary community and smaller lenders from taking up the cause.”