Debunking ‘Myths About Vital Sector’

Cartel Client Review in the press

It was interesting to read the claims made by Carl Wright of Cartel (FA, 27 October).

 

I will not comment on his claims; he is entitled to his opinion. But I will provide a viewpoint from non-conforming lender GMAC-RFC. And I would suggest intermediaries should be using big brands with competitive rates and whose IT provides for greater peace of mind.

 

The non-conforming sector has had a vital role to play in the total mortgage market, highlighted in GMAC-RFC-sponsored research: Non Conforming Mortgages in the UK: A Consumer Perspective.

 

It debunked the myths about the typical non-conforming borrower and showed the rehabilitative effect obtaining a mortgage has on borrowers. It showed the borrower came from all social classes, was generally older, his mean income was higher than the national average and more than half said non-conforming mortgages gave them the chance to improve their credit rating. The main drivers for non-conforming borrowing are not economic but social: mainly divorce, redundancy and illness.

 

Intermediaries need to help these clients. There is a great deal of product choice, but IT has removed the perceived complexities of this sector. With GMAC-RFC, an intermediary can get a binding decision at point of sale on all our non-conforming products within 30 seconds of keying answers to the required information. If the initial decision is a reject, our software will offer the next best alternative. The same procuration fee, typically 0.75 per cent of the loan, is paid on all of our intermediary-direct non-conforming products; it questions Mr Wright’s claim that procuration fee bias is leading to widespread mis-selling.

 

It would be irresponsible of any lender to try and second-guess – in the way Mr Wright implies – the initial advice given by a regulated mortgage intermediary who has conducted a proper fact-find. The regulatory responsibility for the initial product advice rests with the intermediary. The vast majority do their jobs very well.

 

JEFF KNIGHT

Head of Marketing Services

GMAC-RFC

Bracknell, Berks

 

 

Publication date: 3 November 2005

Publication name: Financial Adviser

 

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Instruction

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For each claim to be pursued you will be required to:

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Our in-house team will contact the lender requesting release of all the relevant documentation under the terms of the Data Protection Act.

 

At this point the Client documentation will either pass to the nominated panel solicitor and auditors or you will recieve a refund of the £495 or £175 (please see ‘Refund?’ in FAQs).

 

Please note, as with all claims, there are no guarantees of success.

 

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