Leader: Approval and disapproval
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The Financial Services Authority entered uncharted territory last week by doing something brokers actually agreed with - introducing its approved persons regime.
This was indeed a moment to be savoured but the trouble is that what pleases the broker community tends to displease lenders.
In feedback to the approved persons regime lenders were the ones who objected most strongly and it’s easy to see why.
The FSA estimates that it will cost individual mortgage brokers £450 to be registered and advisers at lenders £600. So a broker might have to forgo their daily Starbucks coffee to foot the bill but the cost for lenders will be much higher.
Staff at banks rarely stay put for a lifetime so if banks have to pay £600 for every adviser in every branch who recommends a mortgage the bill will soon add up. This will lead to cuts being made elsewhere, which will hopefully not result in even more lending restrictions.
In an ideal world lenders would see this as a chance to restrict their branch lending and increase business through brokers to cut costs, but that seems unlikely.
The Council of Mortgage Lenders says the FSA’s treatment of lenders is harsh because they already have procedures to vet staff. But if this was true the mortgage market would not have seen the amount of fraudulent activity it has in recent years.
On a lighter note Mortgage Strategy would like to send its best wishes to Pavlos Joseph, the mortgage broker stranded in South Africa after stumbling into the England team’s dressing room. We hope the industry will soon be able to sing - “He’s coming home, he’s coming home, he’s coming - Pavlos is coming home”.
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