Mortgages Uncovered

The Office of Fair Trading has taken the long overdue step to investigate the Sale and Lease Back sector, which, under existing laws, has no regulation and does not require those businesses involved register at Companies House. It is not yet clear whether there is enough legislation in place to protect the public.

Suffice to say there is a real scandal brewing in the sector that sees companies buying homes at a knock-down price from people who are in need money, only to become a landlord that leases the properties back to the original owners for an agreed period before putting the homes on the market if they so desire.

Although it is perhaps unfair to point a finger at all companies and businesses in this sector, there are a growing number of reported incidents where homeowners who find themselves in need of capital because of short-term financial difficulties they have been facing, have been encouraged to take out Sale and Lease Back agreements when they don’t fully understand what they are getting themselves into.

Obviously this financial arrangement isn’t the same as a re-mortgage, but some customers don’t seem to have seen the difference, nor that they stand to lose their homes when the lease-back period runs draws to a close.

Indeed consumer groups have alleged that such is the pasity of legislation that lease-back landlords are allowed to annul their lease with their tenant and thereby get the property even more cheaply and quickly thean they can already.

We will of course have to wait to see what conclusions are drawn by the Office of Fair Trading and whether the sector will finally subject to greater regulation. However, even if matters are resolved in the eyes of the Office of Fair Trading, there may yet be a media backlash if some of the more sensational stories of families losing homes hit the headlines.

With all the publicity about the credit crunch, you have to wonder how this has affected mortgage advisors or mortgage brokers, as they are also called.

On the one hand, you would imagine that the demand for mortgage advisors has dropped because many people are waiting to buy a house.  On the other hand, house prices have dropped slightly and so those who can now afford it, will be wanting to apply for a mortgage.

Many mortgage advisors have found that the demand for their services has increased, as people have an increased awareness that mortgage rates have increased, lenders are being more particular about applications and they know they need to be sure they have found the best deal for their circumstances.

Having read the Jargon page on this site and the earlier articles, regular readers may now be aware of the vast availability not just of the number of mortgages available from many different lenders but also of all the different types of mortgage types and the way they all work differently.

Perhaps you have even thought of a career as a mortgage advisor yourself?  I have thought about it in the past, having taken out several different mortgages, imagine the money I could have saved myself just by doing my own mortgages.  To become a mortgage advisor, you have to get your CeMAP qualification.  There are several CeMAP courses available from different CeMAP training companies and the quality and prices can vary considerably, so be sure to choose a good CeMAP training provider.