Halifax has apologised to a financial adviser for a “one-off error” that resulted in an existing borrower not increasing their loan ensuring months of delays on what should have been a relatively simple product switch.
Kevin Minshull, associate partner at St James Place Wealth Management, told FTAdviser that he had spent three months dealing with Halifax on a product switch, due to tougher affordability checks on borrowers brought in under the Mortgage Market Review.
Due to his client’s age and original mortgage term, his mortgage was due to finish past the state retirement age and therefore Halifax conducted a full underwiting process, Mr Minshull said. The estimated value of the property was £759,630 and the loan was for £298,632.
As part of this, the client had to produce accounts from the last three years, however as he had changed accountants this proved problematic.
Eventually the client decided to ‘do it himself’ and he managed to get the mortgage on Halifax’s online system without any need to verify his income as long as his original application, via Mr Minshull, was cancelled.
Mr Minshull complained to Halifax, questioning if they were attempting to cut advisers out of the process.
Mr Minshull said: “The client went direct as they were fed up with waiting and he got the mortgage. Following my complaint, I got a call from Halifax stating that the system should not have allowed the client to submit direct, as there was an application in already from me.”
A spokesperson for Halifax said that it was a one-off error and apologised for any inconvenience caused to both the broker and the client.
“As soon as we received the complaint we initiated an investigation that highlighted the error that caused the delay to the application process. The broker should not have been asked to provide additional income verification documents on behalf of his client.
“Our online system cross references direct and broker applications to ensure that direct applicants who have already been submitted via the intermediary channel, will not be processed.”
The mortgage has now gone through and the product switch was to a fixed rate of 2.14 per cent which will end in April 2017.
Lenders have come in for widespread criticism for leaving a number of particularly older borrowers stranded or facing hefty fees after refusing tough new affordability tests despite MMR transitional rules meaning existing homeowners not increasing their loan are exempt.
The FCA has spoken out over the practice a number of times and has raised the spectre of Treating Customers Fairly to deal with the issue.
Elsewhere, the Intermediary Mortgage Lenders Association has complained that the MMR generally disenfranchises older borrowers who are finding it extremely difficult to secure loans which end beyond their retirement date.
donia.o’loughlin@ft.com
