How Lifetime Mortgage Providers are Regulated
The FSA (Financial Services Authority) are the only regulator of lifetime mortgages. SHIP (Safe Home Income Plans) are a self governing trade body; their voluntary members – the lifetime mortgage providers – agree to follow a code of conduct. So whilst SHIP is not a regulator as such, their members do follow a code of conduct designed to give certain assurances to their customers.
FSA (Financial Services Authority)
The FSA is an independent watchdog that regulates all goings on in the financial services industry including lifetime mortgage providers to ensure consumers get a fair deal. They explain services and products to consumers so that they get clear facts without any confusing jargon.
All trusted lifetime mortgage providers encourage consumers to research the equity release market before making any big decisions. The FSA’s website: www.fsa.gov.uk allows you to download publications or you can order useful information to be sent to your home.
Websites for other useful bodies:
- Financial Ombudsman: www.financial-ombudsman.org.uk; They are the official independent expert in settling complaints between consumers and financial service organizations.
- Financial Services Compensation Scheme: www.fscs.org.uk; The FSCS is an independent body that is the last resort for customers of authorised financial services firms – they can pay you compensation if the financial service firm is unable to.
SHIP (Safe Home Income Plans)
SHIP is a company supported by the majority of the UK’s leading lifetime mortgage providers. It was established in 1991 and ensures the protection of equity release plan holders and the promotion of safe home income and equity release plans. Being a member of SHIP means lifetime mortgage providers have to follow a code of conduct and offer the following assurances to their customers:
- Lifetime mortgage providers must allow customers to remain in their home for as long as they live if they wish on condition that the property remains their main residence.
- Lifetime mortgage providers must give customers fair, simple and total presentations of their equity release plan. The pros and cons of the product together with any obligations on the part of the customer must be clearly stated from the outset. All costs should be set out clearly as well as added tax implications, their position on moving house and the effects of changes in house values on their loan.
- Lifetime mortgage providers must let customers pick an independent solicitor to carry out their legal work, and lifetime mortgage providers must also supply the solicitor with complete details of the benefits their client will receive prior to the completion of the plan. The solicitor will sign a certificate to ensure that the equity release plan has been fully explained and understood.
- All SHIP plans carry a ‘no negative equity’ guarantee, meaning customers will never owe more than the value of their property. For more information go to: www.ship-ltd.org
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