regulated mortgage work?

regulated mortgage work?

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Received a mortgage reference for a client of mine over the weekend and one of the questions asks whether i consider that the client will be able to meet the repayments.

Firstly I do not act for both parties on the mortgage and as such I do not deal with their personal finances and cannot answer that question (only deal with company affairs of one party and complete their personal tax return).

Secondly is this not a part of being regulated for providing financial advice, ie. Advising on whether a person is able to repay a mortgage?

My response is going to along the lines of "I do not act in the capacity of dealing with Mr X personal finances nor do I act for Mr y and as such I am unable to comment further. Please refer to their IFA"

There are also a couple of other questions that i am unable to commemt on. In thr past i would have been happy jist to ignire the questions, however i have jot done a mortgage reference for about 3 years. AM I being too cautious or is it still the same that the lender tries to ask questions that no accountant is able to factually answer?

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By Roland195
26th May 2015 10:21

A balancing act

I have the same issue as you have described - I want to be able to help my client in what is arguably a more important issue to them than their taxes however I am wary of being asked to provide assurance that I am unable/unwilling to give.

It is my understanding that this is not providing financial advice and therefore not regulated however it seems to me it would be dangerous to answer such questions without appropriate caveats.

So far, I have not experienced the lenders objecting to the caveats, get out clauses & weasel words that I write so doubtless just a box ticking exercise with little review but better safe than sorry.  

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By geoffwolf
26th May 2015 11:17

You can only give factual answers.

As a Chartered Accountant I always replied to the question by saying that our Institute does not allow us to look into the future or words to that effect.and that our replies should not be construed as us providing any form of guarantee on behalf of our client.

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Stepurhan
By stepurhan
26th May 2015 13:58

Woolly response

You need to make it clear you only act for one of them.

After that, something along the lines of "We have no reason to believe our client would enter into any commitments they did not feel able to fulfill". You haven't said that they will repay. Nor have you commented on whether their income is sufficient to pay any amount due. It's meaningless, but seems to tick mortgage company boxes.

You still want the caveats about it only being to the "best of your knowledge and belief" and no responsibility being accepted to anyone relying on the reference.

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