PPI Claim News - 8/10/2012
Could the mortgage industry be facing a PPI-style scandal?
The UK's mortgage industry could be facing another scandal similar to the payment protection insurance (PPI) issue, it has been said.
Headlinemoney.co.uk editor Andrew Michael said the interest-only mortgage lending sector has been said by some extreme messengers to be "another PPI misselling-style scandal waiting to happen".
Some people have warned that borrowers who used this route to purchase a house could face "all manner of ghastliness", the expert continued.
He noted that some lenders have been adopting different stances on providing this type of home loan recently, with Leeds Building Society, ING Direct, Santander and Coventry Building Society cutting the maximum loan-to-value rates for these products to 50 per cent, from an original figure of 75 per cent.
Furthermore, Nationwide has stopped offering these loans to new borrowers, Mr Michael added.
"I suspect the mortgage market will swerve a misselling scandal, especially one of PPI-style proportions," he predicted.
So far, the UK's largest lenders have set aside more than £10 billion to deal with PPI refunds.
Samantha Clarke
Samantha is a former banking assistant and has over ten years experience in retail banking.
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