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Burgesses Blasts Brokers Over Repossession Nightmare

The revelation that more than one in five homes is for sale because owners cannot afford mortgage repayments could be evidence that intermediaries have 'sbeen asleep at the wheel's. That'ss the belief of Sara-Ann Burgess, the Managing Director of independent protection insurance specialist Burgesses.

She says that if the majority of mortgage brokers had been carrying out their duties in a professional manner then far fewer homeowners would be in danger of losing the roof over their heads.

A new survey of estate agents suggests that at least 5000 properties a week are being put up for sale by forced downsizers.

Burgess explained: When mortgage brokers were brought under the umbrella of regulation by the Financial Services Authority (FSA) almost four years ago they immediately had a duty of care to their customers.

That duty of care extended to much more than arranging a mortgage or remortgage for their clients. They were also duty-bound to point out the dangers of missing mortgage payments and offering solutions to mitigate such a situation occurring - especially if this was caused by the borrower being unable to make repayments because of accident, sickness or unemployment.

A competent financial intermediary should be advising their clients to take out payment protection insurance (http://www.britishinsurance.com) cover to ensure peace of mind for when the hard times inevitably do arrive. The fact that so many people are now facing or dealing with the nightmare of repossession suggests some brokers have been asleep at the wheel.

Presently mortgage brokers need not be on a list of approved persons unlike investment advisers. However the FSA says is reviewing whether it needs to regulate every single mortgage broker instead of firms as a whole and their directors. Registration will only be imposed on mortgage brokers if it'ss found to be necessary for consumer protection.

But that does not prohibit the FSA taking action to protect customers. A UK mortgage broker was recently fined after he was found to have given advice to consumers that put them at increased risk in the current financial climate. The regulator said at the time that giving customers the right advice and treating them fairly was crucial.

Quarterly figures published by the Council of Mortgage Lenders show 11,300 homes were repossessed in the three months to the end of Sept that'ss a rise of 12 per cent on the previous quarter. Mortgage possession orders were up 24 per cent at 29,516 in the third quarter compared to the same period last year, according to Ministry of Justice figures. Possession orders - which are decisions made by judges in the county courts - were up 3 per cent on the second quarter of this year.

But many homeowners are unaware that peace of mind can be purchased from independent insurance outlets such as British Insurance (http://www.britishinsurance.com) where mortgage payment protection insurance premiums for a 25 year old start at 's163;1.60 or around 25% of the average price charged by the top 10 lenders.

The current crisis for those struggling with mortgage repayments has been exacerbated by the recent stonking 1.5 per cent reduction in the bank base rate. Up to 90,000 hard up homeowners on benefits and getting mortgage interest support will see that reduced by 1.5 per cent - even if the interest on their mortgage is not cut by the same amount.

That could mean a 2k per year shortfall and the consequent threat of repossession.

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