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Execution-only risks new mis-selling crisis

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The Association of Mortgage intermediaries has warned that a shift to execution-only sales could cause a "number of worrying potential unintended outcomes" including the potential for future compensation claims.

The FCA's latest Mortgages Market Study report has been accused of promoting execution-only mortgage sales and the AMI says a move to allow execution-only sales to re-enter the mainstream market "is a mistake, and one that will lead to the FCA’s own Mortgage Market Rules on advice being gamed".

It has warned that mortgage product could begin to design up front offers that look attractive to customers, "but which may include penalty clauses that bite at the tail end of the deal period, raising the possibility of accusations of unfair contracts”. The Association linked the risk to the experience of discount rates sold to sub-prime borrowers in the run into the financial crisis.

Posted by MMB Finance Swindon on 7 October 2019