Small mortgage brokers encourage debt says report
Small brokers who offer customer mortgages that are too large for their means are placing consumers at risk, says the Financial Services Authority (FSA).
A review of sub-prime broking houses revealed that there were both good and bad practises across the market.
Sub-prime lending is the field that caters for consumers with bad credit histories or those who mortgage groups have refused credit to.
It is particularly important for financial providers to check that these people can cope with their debts, and the FSA found 'too many cases' of firms not following these procedures.
'Sub-prime is a growing area of the mortgage market and we have identified it is a priority area for our mortgage supervision,' said Andy Watson, head of the FSA's mortgages & credit union department.
However, the report also demonstrated that fifty-eight per cent of firms go beyond the recommendations and plan to review a customer's products once their credit profile improves, giving customers access to better rates.
Two firms in three also issues a letter giving the reasons behind a recommendation. | 
