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    Really Interesting Finance News
    Really Interesting Finance News
    Sunday, 21 July 2019 05:46

    Madness of affordability claims

    Each day we receive 30-40 claims about loans that were mis-sold due to not being affordable for borrowers. We want to show you how bizarre these claims are.

    Since the FCA came into power, lenders have been required to perform affordability tests on all loan and mortgage applications. We need to check how much they have coming in and how much they have going out every month. We need to make sure that borrowers have enough spare cash to cover the repayments.

    First of all, not all applicants tell you the truth and lenders have no way of verifying how much someone spends on their electric or food each month. The whole thing is a joke, and we all know it. Lenders know that the figures are irrelevant, and the FCA must understand that the figures are irrelevant. It's just one of those industry jokes where everyone knows it is a load of bull, but everyone insists it must be done.

    Affordability Issues Grounds For mis-selling?

    Now, even though everyone in the industry knows these boxes on the application form are there only for show, they were harmless. It's a pointless set of 6 extra questions on an application form that nobody worried about.

    Well, that was until some virtue signallers got involved. Certain TV personalities and MPs believed that these boxes meant something and convinced their flock to start claims.

    Now we have 30+ claims a day from people who are now trying their luck in making claims against us. They seem to be suggesting that the figures they gave us were wrong and that we didn't do our job in catching them out. Most likely, they require us to compensate them for lies surrounding their inflated income and suppressed outgoings.

    But here is the catch 22 about affordability claims and why the whole claims culture is something we ignore.

    Lender "Did you make your repayments?"

    If the claimant says yes, then the loan was evidently affordable, and no compensation is warranted.

    If the claimant says no, then no compensation is required they didn't pay us anything to be compensated for in the first place.

    It's about time that sites like ours stood up to this madness and told the truth to those who want us to take money from today's borrowers to compensate them for their bad behaviour of yesterday. Loans would be cheaper for everyone if they did.

    Our news service is great because it pulls no punches and doesn't allow political correctness to interfere with our views.
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