Don't be left out of reform process as MMR comes alive

25 January 2010

Our Mortgage Market Review will come to life this year as we follow up on the ideas we put forward in the discussion paper last autumn and push ahead with working groups and consultations on some of the key issues.

The first part of this work will be seen later this week when we consult on extending our approved persons regime.

This is the system we use to vet those holding important regulatory roles at firms to ensure they are fit and proper to perform their roles.

We aim to make mortgage advisers - both those in intermediary firms and those in banks and building societies - and professionals with compliance oversight more accountable to us by requiring them to be approved persons.

This will help us keep rogue individuals out of the industry, better track professionals as they move between firms and assist us in tackling the problems of unsuitable advice and fraud.

Have your say on the consultation by visiting our website and filling in the online feedback form

This is a change to the approach taken when mortgage regulation was introduced just over five years ago. Then we applied the approved persons regime in only a limited way.

We believe this limited application is no longer appropriate and is preventing us from having a truly effective oversight of the sector.

Our paper on extending the regime will outline how the approval process could work as well as indicating who it will affect.

As always with our consultations you can have your say by visiting our website and filling in the online feedback form you will find there or by emailing the paper’s authors. Look for details on our website later this week.

We combine the paper with a consultation on improvements to our arrears handling rules.

Through the £2.8m fine we imposed on GMAC-RFC last year you will have spotted that we are serious about making sure customers in arrears are treated fairly.

I mentioned fraud earlier and this reminds me of a letter in the December 7 issue of Mortgage Strategy. In this Colin Cole asks why the regulator does not report cases of mortgage fraud to the police.

I would like to reassure him that we do this and furthermore that mortgage fraud is punishable by custodial sentences.

We discuss nearly all our mortgage fraud enforcement cases with police or other relevant agencies.

We have prohibited 76 mortgage brokers since 2007 and some of these cases will be investigated by the police.

It takes longer for cases to move through the criminal justice system but I would not be surprised if we see more mortgage fraud prosecutions in the course of this year.

LESLEY TITCOMB
DIRECTOR OF SMALL FIRMS
THE FINANCIAL SERVICES AUTHORITY

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