Amber slated over sell-on SVRs

Amber Homeloans has been criticised after borrowers' payments increased substantially when the lender sold its loans to a company whose standard variable rate (SVR) was noticeably higher than its own.

Philip Miller, an adviser at Mortgage Advice Bureau, said a client he had placed on a discount SVR-linked product with Amber faced higher repayments after the lender sold the loan to Redstone Mortgages.

He said: "If the loan had stayed with Amber, they would be paying 6.29% but instead they are now paying 7%. While the client signed something to allow them to sell the loan on, she received two letters, one from Amber and one from Redstone, telling her nothing would change after the sale."

Miller suggested Amber's actions compromised the principles of treating customers fairly (TCF). "Any material changes made without prior consultation that have the potential to disadvantage the client, are clearly going against the grain of TCF," he commented.

Julien Holmes, managing director of Crown Mortgage Management, which administers mortgages after they have been sold on, said in any sale he had been involved with, the mortgage conditions had remained the same.

Amber said its actions were legitimate, as borrowers signed a clause allowing the lender to sell the loan on. Gordon Jolly, managing director of Amber, said it tried to protect customers from rate hikes when loans were sold on.