Brokers and lenders need to take up the cause of mortgage prisoners who have been abandoned by the regulators, Jeremy Wood, chief executive at the Dudley Building Society, has said.
He warned that many borrowers will be hit hard by the loss of the Financial Conduct Authority's transitional rules for the treatment of mortgage prisoners, which have been removed at the insistence of the EU.
Wood called this another example of compliance working against the best interests of customers, but he urged brokers and lenders to fight back.
"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."
Wood said many in the industry have been taken by surprise by the "extraordinary" decision.
"The raft of regulation under MMR was specifically designed to keep the interests of customers foremost.
"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, and yet our European lawmakers have seen fit to torpedo this."
Wood is concerned that in the rush to have conformity across the EU, the UK's more sophisticated lending market is going to be saddled with a decision which causes very real customer detriment.
"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."
And he added that there is no compulsion for lenders to treat these existing borrowers fairly. "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 they start to go up then those on SVRs are going to suffer.
"It cannot be a good outcome that a significant part of the population will be excluded from the remortgage market via rules which are supposed to help them."
What has also been concerned by the lack of voices in the industry campaigning to reinstate the transitional rules beyond March next year.
"I would be aghast if we just simply accept this as a fait accompli."
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