If the Financial Services Authority (FSA) is incapable of creating a fair, transparent and effective payment protection insurance (PPI) market, then those responsible for the failure should be put out to pasture, says Burgesses Limited.
Braintree, Essex (PRWEB) October 1, 2008 -- If the Financial Services Authority (FSA) is incapable of creating a fair, transparent and effective payment protection insurance (PPI) market, then those responsible for the failure should be put out to pasture.
Sara-Ann Burgess, MD Burgesses
Again, consumer watchdog Which? has been forced into demanding action is taken over the shockingly poor performance of firms in the PPI market. However despite the litany of criticism that has rained down on the market, the regulator has done little to root out poor practice and deter future failures.
Sara-Ann Burgess, director of PPI specialist Burgesses, believes many of the failures of this market stem from the regulator's unwillingness to take decisive action.
"It is time the FSA stopped barking and started biting. There have been numerous reports into this market, which have highlighted the areas that need to be improved. If firms selling PPI do not come up to scratch then they should now expect to lose their authority to trade in this area."
Burgess accepted that some firms had been fined, but said the level they had been fined at was not sufficient to clean up the market or the sanctions numerous enough to make others believe they would be caught.
"There has to come a time when we stop slapping the market on the back of the hand and take it firmly by the scruff of the neck. The FSA's approach of trying to cajole firms into compliance has spectacularly failed and it is the thousands of consumers who have been mis-sold policies that lose out."
Burgess said Which? was right to call for firms found wanting to review their entire book of business and for better information to be available to consumers. However she added: "How many times can the FSA listen to such demands and simply carry on as before? Consumers are losing out because the FSA has shown itself incapable and unwilling of acting decisively in this market."
When providers such as British Insurance can sell policies, which are more flexible and have better benefits for half the price of those still being sold by high street providers, Burgess said the regulator needed to take stock of the situation.
"There is a huge discrepancy between the best and the worst PPI sellers in this market and we need to close the gap and make sure consumers get the insurance they need. The FSA could regulate the products sold, take a much harder line on those found wanting, or stop credit providers selling only their own protection insurance. It has been offered numerous options but has refused to really put its weight behind any of them."
The longer the regulator allows the problems in the PPI market to continue, the more consumers will be negatively affected and the more difficult it will become to really deal with them.
"The FSA needs to find the appetite for this work and quickly," said Burgess. "If the people overseeing the protection market are incapable of doing it properly, then it is time for them to move on. Those firms doing a good job in the market are being let down by the regulator, while consumers continue to get a raw deal because the FSA will not come down as hard as it could and should in this area."
Online consumer lender delivers better options for unsecured loans to fund anything, including home improvements, vacation ownership, education, medical expenses and more.
San Diego, CA (PRWEB) October 1, 2008 -- Every week the adage "you can take it to the bank" seems more outdated as the banking industry dumps more bad news on consumers. The news of banks failing has consumers in a panic. Big-name lenders are reducing or freezing existing home-equity lines of credit. Others have put the brakes on auto leases and are making it harder to get loans for education, home improvement, vacation ownership and more. Moreover, traditional lenders continue to treat all borrowers the same--with undifferentiated products and indifferent service.
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FirstAgain LLC is redefining consumer lending for individuals with excellent credit. The San Diego-based company has developed a completely paperless, online experience for applying, approving, signing, funding and servicing unsecured personal loans. FirstAgain's AnythingLoan can be used for any purpose, including home improvements, vehicle purchases, educational and medical expenses, timeshares, vacation ownerships, marine products, loan refinancing and anything else. Most AnythingLoan finance amounts range from $10,000 to $100,000 with low rates, same-day funding and an unparalleled customer experience. Timeshare and fractional financing loan amounts start as low as $7,500. FirstAgain was founded by the pioneering veterans of PeopleFirst, a company which grew into the nation's largest online auto lender prior to its sale to Capital One in 2001. The company operates nationwide and has financial investments from Merrill Lynch and Arsenal Capital Partners.
No free ride solution, Howard Dvorkin devises a plan that keeps American's in their homes without relying on a taxpayer bailout. The $700 billion bailout plan does little to avert foreclosures, the root of the crises. Banks and lenders who granted unstable loans should get a 40 percent penalty and consumers should be offered 50+ year mortgage repayment plans.
Ft. Lauderdale , FL (PRWEB) October 1, 2008 -- America needs a plan that does not reward people for bad behavior and at the same time keep people in their homes, without having taxpayers pick up the tab. Currently nearly $100 billion worth of loans are deemed at risk for foreclosure over the next two years as borrowers with adjustable rate mortgages, see rates adjust. Some borrowers with these loans are being informed now of payment changes and the bulk of those loans will reset in 2010.
"The housing calamity is at the heart of the problems that our economy is facing right now," says Howard Dvorkin, CPA, personal finance expert, author, founder of Consolidated Credit Counseling Services and former consultant to the Resolution Trust Corporation hat focused on bank work-outs in the late 1980s. "Looking at the numbers it seems the average increase in mortgage payments will be 65 percent and payments could jump by as much as 100 percent for some people," he continued.
Until now, the majority of the mortgage crisis was caused by subprime loans -- those with high interest rates made to borrowers with poor credit. However, borrowers at risk now on average had good credit but stretched their budgets with option- ARM loans.
Howard Dvorkin is proposing a viable solution to help solve the mortgage and credit crisis in the United States. "Once mortgages have been taken over by the newly formed government agency, they should only pay the surrendering bank 60 percent of the original loan value. The 40 percent loss from the original lender would be funneled back into the governmental agency to help fund any necessary related expenses. Once the loan is transferred, the homeowners would then be allowed to enter into a 50 or 60 year mortgage at the prevailing interest rate, assuming no negative amortization occurs," said Dvorkin.
"The key is to get the monthly mortgage payment amount similar to when the consumer first took the loan out, before the ARM reset. Extending principal payments over 50 or 60 years, would allow the consumer to be responsible for the principal amount of the original mortgage. This plan would require some tax law modifications but it would keep American's in their homes," continued Dvorkin.
Dvorkin's proposed plan will punish all parties involved. Punishing lenders for giving loans to people who couldn't afford them and those consumers who knew they would not be able to afford the mortgage long-term. Nationwide, there have been 2 million filings this year and RealtyTrac, a company that monitors foreclosure activity, projects 2.5 million additional homes will enter foreclosure over the next year.
Note to Editor:
Howard Dvorkin available for interviews
Contact: April Lewis -Parks 954-377-9344 /Alewis@ConsolidatedCredit.org
AVAILABILITY: Florida , nationwide by arrangement and via telephone