CML welcomes ombudsman's findings on interest-only lending
Published: 4 June 2014 | Author: Bernard Clarke
We welcome the confirmation in the recently published Financial Ombudsman Service annual review that there had been "relatively few complaints" from interest-only borrowers who had come to the end of their mortgage contract and could not repay the capital.
We welcome the ombudsman’s conclusion that, based on the evidence available, "many lenders seem to have been working constructively with customers who had found themselves in this position."
We will be providing our own update on interest-only lending at our conference Interest only: Still interesting on 10 June. (This event has now closed)
The ombudsman reported a 6% overall increase in complaints about mortgages in 2013/14, but the total of 12,606 equates to just 0.1% of the more than 11.1 million mortgages outstanding in the UK.
The ombudsman’s report also said that it was increasingly finding that customers in financial difficulty were leaving it very late before seeking help. We continue to urge any borrowers anticipating a problem in paying their mortgage to contact their lender as soon as possible.
Areas of complaint about mortgages noted in the report included:
- a "small but steady number of complaints" about inappropriate advice when taking out an interest-only mortgage; and
- changes to interest rates on standard variable and tracker mortgages.
We will be working with members on the issues raised in the ombudsman’s report in the weeks ahead.