Trade bodies release guide on broker and lender responsibilities  

22 October 2010 | By Natalie Thomas

The Association of Mortgage Intermediaries, the Intermediary Mortgage Lenders Association and the Council of Mortgage Lenders have produced the Working Together guide together.

They say the guide should be read in conjunction with the relevant MCOB and treating customers’ fairly rules.

And the document does not consider commercial relationships between lenders and intermediaries and does not apply retrospectively.

It says ultimate accountability for the affordability of a mortgage lies with the lender, although the intermediary is responsible for establishing affordability to make sure that, when advice is given, a particular mortgage is appropriate and in accordance with the lender’s published criteria.

The guide advises that the role of the lender should be to:

• Assess suitability across target markets
• Develop the product/ service proposition and the production of marketing literature and advertising
• Monitor general trends in sales
• Administer the product
• Generate regular statements (at least annually) for consumers
• Offer a proactive and reactive service contact as appropriate
• Deal with customer queries, claims and complaints

And the role of the broker should be:

• Work with individual customers or small groups
• Focus on the acquisition of customers, creating and maintaining customer relationship, and advising on product suitability
• Take primary responsibility for monitoring individual sales for appropriateness
• Initial processing of product sale
• Service and consider ongoing borrowing requirements and alternative needs
• Deal with customer queries, claims and complaints

In setting out to develop this guide AMI, IMLA and CML took the view that the relationship between lenders and intermediaries is based on a number of key premises such as s shared commitment to work effectively together and in the best interests of the customer.

Robert Sinclair, director of AMI, says: “I would like to extend my gratitude to all the lender and broker representatives who have given time and effort to arrive at what is an extremely practical document.  The work undertaken has done much to cement the value that all parties bring to ensuring a vibrant and competitive mortgage market that works well for consumers.  AMI very much anticipates this is the start of a longer collaborative journey.”

Peter Williams, executive director at IMLA, says: “We have been working on this for some months and have consulted widely. Our hope is that it will make a real difference in terms of overall performance of the intermediary mortgage market place. We are delighted this has come about and through real cross trade body collaboration on this key sector. The UK market remains challenging and good advice and support will be at a premium. We hope the guide will help make that a reality.”

 

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