Grahame Harwood, Director of HCM Mortgage Consultants, explains how he is often referred clients who have fallen victim to brokers offering negligent advice. By highlighting such scenarios, Grahame hopes to stimulate better practices while upholding the high standards set by the majority of introducers…

I have now been referred quite a few clients where mortgage brokers have messed up.

One broker had wildly miscalculated the maximum possible mortgage available to his client. This resulted in the client being unable to purchase his chosen property after 12 months of searching. 

Another broker had informed a client that she would have to provide a 25 per cent deposit in order to qualify for a mortgage when, in fact, 10 per cent was adequate. The broker also failed to notify her of alternative options, namely the ‘HomeBuy’ scheme which would only have required a five per cent contribution. 

One client had been informed that a blemish on his credit file from five years ago was preventing lenders from considering his mortgage application. He was subsequently advised that he would have to wait until this fell off his credit record at the six year anniversary – this turned out to be totally incorrect. 

In another case, a bank adviser informed a 70 year-old lady that her property would be repossessed because she was not on course to repay the full capital balance within the coming six months (this story gets even worse, but I will spare you). Needless to say, this was factually incorrect and was resolved quickly by remortgaging with another lender. 

Surprisingly (or not), most of these brokers or advisers were employed by either a high street bank or a national estate agency chain. 

Is a lack of skill, integrity and professionalism among mortgage brokers one of the reasons that potential house purchasers are struggling to get mortgages?

Whilst the financial regulator seems to think that ever more qualifications are the answer, I beg to differ. In my experience, the fact that advisers have passed more exams doesn’t necessarily improve their behaviour, creative skills or common sense. My 85 year-old neighbour summed things up for me the other day with a real gem: “There has never been any training or degree course that ever came close to sitting next to Nellie…”

It seems that there is now a realisation that learning on the job provides an unparalleled depth of understanding, though the theory doesn’t always apply in practice. There are tremendous benefits from apprenticeships, in that the student can acquire a great deal of valuable knowledge from his or her experienced colleagues. It is very encouraging to see advisory firms now employing people at a young age and training them on the job, from scratch.

It is important to note that little skill was required in placing mortgages during the boom years. Perhaps advisers now require retraining in order for them to fully adapt to the new landscape…