From an article in The Times, uncovered by Drewster and Sold Out over at HPC:
The Financial Services Authority said yesterday that more than half a million Halifax customers on tracker mortgages should benefit from further interest rate cuts even though the small print on their loans supposedly prevents them from doing so...
Jon Pain, the FSA's retail market manager, said yesterday that this 3 per cent threshold, or “collar”, could be unenforceable. He said collars should be included in a lender's key facts illustration (KFI) - the mortgage documents given to every borrower. Halifax removed the details of its collar from its key facts in 2005.
That would be bad enough ... but what's this?
It emerged yesterday that the removal of details of the tracker loan collar from the Halifax mortgage key facts in 2005 was the result of concerns that the FSA raised over the complexity of the Halifax's mortgage documentation. The regulator was worried that the 11-page key facts statement was overblown for a document designed to highlight the key elements of the loan, and asked for it to be trimmed back. The collar detail was one of the items removed and relegated into the smaller print of the larger mortgage document.
What have we wrought in the UK?
6 hours ago
3 comments:
I can easily see how this would happen. I wouldn't be surprised if more of this kind of thing doesn't come out of the woodwork.
Cheeky buggers. I agree with Obnoxio that there will be a lot more arguments about the smallprint in mortgages when banks start to misbehave.
Listen, the Key Facts statements are pretty well and FSA prescribed document. It's in the format that the FSA want. I spent several weeks of time getting our key Facts for mortgage raelated business compliant with the FSA's rule book - a complete waste of time please not - and the rules are complex and onerous. (In passing there is a philosophical inconsistency in the prescription of the text to be used in our Key Fact us that when challenged they could not answer).
The FSA is as equally culpable as the Halifax, if not more so, by attempting to implement Brown's Bonkers regulatory system which amounts to nationalisation Lite - or nationalisation by over regulation.
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