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Brokers should prepare now to help mortgage prisoners

Mortgage brokerage CLS Money has warned advisers that it’s high time they revisit all of their customers who have struggled to remortgage and have since become ‘mortgage prisoners’.

In light of the Financial Conduct Authority (FCA’s) recent announcement to take immediate action to review the affordability guidelines lenders must follow, CLS is urging brokers to be in touch with their customers who are still affected and tell them that there is some good news to share.

“Lenders have already done as much as they can to ease the plight of borrowers stuck in mortgage limbo while remaining true to the regulator’s guidelines on affordability,” said Clayton Shipton, managing director of CLS.

“Now, the FCA, to its credit, has recognised the unintentional consequences of the blanket guidelines it set out and rightly is acting to relive the situation.”

Shipton advised that, as it will take some time for consultation with the industry to lead to action, brokers should go back to their client backs now and look for the cases where they have been unable to help customers in the past.

By doing so, customers will be made aware that their advisers are working hard behind the scenes for them and advisers will retain the loyalty of said customers, as well as provide another opportunity to undertake a review of other needs.

“We are already planning to contact customers to let them know there is likely to be good news and that their situations are in good hands with us,” Shipton continued.

He said that in 2019, all advisers will need to ‘work smarter in a more challenging market’ to ensure that their businesses continue to be successful. This will prepare existing customers for the opportunity to remortgage to a better deal.

“But be aware that if advisers don’t take action now, it is highly likely that those customers will go elsewhere for help as soon as the chance to move lenders comes up,” Shipton warned.

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