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Top Compliance Errors on Mortgage Files

Posted by H3 on 2019-07-02 15:18:30 BST

These are some of the most common errors picked up from file checks over the last 12 months. Easily avoided with the correct tools and time spent when completing paperwork.


If you are unsure how compliant your files are, why not get a one off comprehensive file audit.  The file audit covers every aspect of the advice process, cross checks information for consistency, reviews suitability of advice and TCF but also a full review of the documents being used to establish if any shortfalls exist and if they can be improved.  Simply contact us now to request your audit.


Incomplete Factfinds

This not only includes factfinds with questions unanswered but also factfinds which are outdated or lack the required questions to collect the information needed.  Incomplete or badly designed factfinds can lead to poor advice.  If your factfind hasn’t been updated in the last three years or you want something easier and shorter to complete please get in touch.


Inadequate Debt Consolidation Advice

Debt consolidation mortgages a higher risk advice area which many brokers fall short on.  Often the file doesn’t have any cost analysis, options not explored and suitability not evidenced.  If you want fully compliant mortgage files and an easy to use debt interest comparison tool we have this currently on offer click here.


Inadequate Evidence Of Research

Key failings include no research evidence on file, no explanation why a provider was chosen especially when cheaper mortgages are seen.  Not using correct sourcing filters, long delays between the original sourcing and application and the adviser relying on the original sourcing from several weks a go. Cases when something has changed due to new information and new sourcing has not been carried out.  You need to be able to evidence the research you have carried out and the reason for the recommendation made, if not clearly the cheapest due to criteria then why cheaper mortgages have been discounted.


Missing Information From Bank Statements

It’s common to find discrepancies on bank statements overlooked by the adviser. Information on the file doesn’t correspond with what’s on the statement.  Different pay in details, credit commitments not previously disclosed or accounted for in any budget planning, unusual movement of funds.  You must always check thought he bank statements and cross reference this with payslip information; liabilities disclosed on the factfind and question any unusual information.  Too often details are overlooked which usually impact the advice given.


Inconsistent Information

Information on file should be consistent, information on the application should match the fact find and document proofs providedt.  We appreciate information can change during the application process, and documents supplied by the customer can provide different figures. The file should include an explanation or notes detailing what has changed and why, if this impacts on the advice in any way then new research should be undertaken to ensure the recommendation is still the most suitable. 


Some other items picked up from files include:

- Insufficient evidence of deposit

- Documents supplied being too old

- Not allowing for childcare costs or notes to explain the arrangements in place

- Non-compliant terms of business or disclosure documents

- Wrong information on suitability letters

- Lack of fraud checks


We find just as many errors on equity release mortgages and insurance sales.  File quality and overall compliance can be improved very quickly following a file audit.  We have fifteen years’ experience auditing files as well as previous adviser experience so we fully understand the challenges, the sales process and the compliance requirements.  For more information on how we can help your business please get in touch.



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