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Tuesday, September 02, 2014

The Greed and Stupidity of Our Financial Institutions

As I have noted many times before, Britain's financial service industry has hardly covered itself in glory during the past few decades.

Sadly there is now another example of greed and stupidity that is coming to light.

According to the Telegraph middle-aged home owners are being denied cheaper mortgage deals because lenders claim that customers would be unable to afford the lower repayments after they retire. As a result, borrowers in their 40s and 50s are being trapped in loans with higher interest rates, leaving them on course for unnecessarily large bills in old age.

To add insult to injury, banks also refuse to cut borrowers' loan terms so that debt can be repaid sooner.

Mayur Vadhia, 49, was told by Halifax, Britain's biggest mortgage lender, that he did not qualify for a cheaper deal because he had no proof of his retirement income. Yet his existing loan with the bank was scheduled to last past retirement age at a higher rate.

Now that's just stupid!

It also seems that lenders are incorrectly applying new affordability criteria, which are designed for new borrowers.

Not only are the financial institutions stupid, they are greedy and incompetent as well!
 

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