Providing independent advice to the public regarding the financing of their biggest asset is crucial.
Recent press reports about banks and their practices have affected the public’s perception of the marketplace and confidence in them is at an all-time low.
I feel that our services should see us getting government grants for the good work we do and not lead to us paying extortionate fees to provide a national service.
Our services should see us getting grants from government for good work, not paying extortionate fees to provide a national service
No-one knows better than mortgage brokers that we are in a recession and funds are tight. If the public cannot get access to decent advice, they will pay over the odds for their loans and, as a result, the government will pay out more in benefits to replace lost income and increased levels of repossession.
Support for removing our Financial Services Authority fees is a great investment to ensure benefit levels are maintained or even reduced.
Joined-up thinking is what we require, not just kneejerk reactions to budgets within departments.
Kill the fees – don’t just aim for a reduction.
Robert Winfield, Chartwell Funding
Fewer advisers and less business should result in lower fees
I am writing to add my support to Mortgage Strategy’s recently announced Bring Down FSA Fees campaign.
If the regulator’s income from mortgage firms has dropped, this surely reflects a reduction in the number of mortgage advisers and a reduction in the amount of mortgage business being written by them.
Therefore, with fewer advisers operating and less business being written, the FSA’s costs should come down as the mortgage market should now cost a lot less to regulate overall.
It is unfair to argue that its budget needs to be the same when less business is being written and expect the advisers that are left to foot the bill.
Dave Rees, Independent Mortgage Adviser
Levies must not be subject to theory of diminishing returns
I fully support the campaign to bring the FSA, or whoever is in power at the time, under control.
It surely cannot continue to use the diminishing return theory for fees and Financial Services Compensation Scheme levies.
What we should be suggesting is some form of austerity cuts in Canary Wharf.
Brokers have to give practical reasons for a reduction in fees
Asking advisers to support a reduction in FSA fees is like asking turkeys to veto Christmas – of course we will – but we must offer practical reasons.
These might include the fact that complaints against mortgage advice by brokers are a negligible element of the FSA’s work and, indeed, lenders seem to police much of this.
Also, I do feel the FSA’s budget and staffing numbers should be linked to the number of advisers they regulate or level of revenues they oversee.
This way, if the Retail Distribution Review and the Mortgage Market Review adversely impact the market, they will accordingly need fewer bodies to do their work, as naturally advised sales represent a greater risk than non-advised.
It defies logic that the FSA budget is increasing, but the number of brokers is reducing. It cannot seek more from a smaller base to avoid losing staff.
Someone should look at how the FSA goes about spending funds
I am certain I read only a couple of weeks ago that the FSA had told the government it would be reducing its operating requirement – in what looked like a kind of boast. Now we know it intends to do this by raising fees to compensate.
Someone should take a look at how the FSA spends its funds.
Pensioners are too canny to lose out on available benefits
I was interested to read the research from Just Retirement Solutions that more than half of clients seeking advice on equity release fail to claim any or all the state benefits they are entitled to.
The reason why so many pensioners don’t claim pension credit is because they have substantial capital tied up in savings accounts such as ISAs and other investments. If they did declare these savings they would not be entitled to pension credits as they would have too much income.
They may be below the threshold based on their monthly income but they would be over the limit if all their capital was taken into account. This is the reason why they do not claim.
No-one is so stupid to not take free cash. That is why fraud is so rife with all welfare benefits.
Massive rise in house prices was down to dual income families
Ray Boulger, senior technical manager at John Charcol, wrote an interesting blog on Mortgage Strategy Online in the run-up to the Queen’s Diamond Jubilee on house price growth during her reign.
His explanation about why we have seen house price growth over the period was interesting.
Along with the boom in securitisation and product innovation, he argued that a second factor in the rapid rise in house prices was the collapse of the building society cartel in the early 1980s, the entry of banks into the mortgage market and the hike in funding due to the liberalisation of the money markets.
But I believe another factor in the exponential house price increases has been the two-job culture – where families outbid each other on the basis that both mum and dad had an income.
Building societies would perhaps have lent 3 x main income plus 1 x second income but the banks have operated under less restrictive rules.
The market now needs a serious correction.
Name and address supplied
Online forms for PPI mis-selling can lead to fictional claims
A story on Mortgage Strategy Online last week revealed that the Ministry of Justice is warning claims management companies that they face enforcement action for failing to deal with complaints properly.
In its June newsletter the MoJ, which regulates the sector, says it is in the process of issuing formal warnings to the worst offenders.
The newsletter defines a complaint as any expression of dissatisfaction, verbal or written, whether justified or not, and insists firms must have effective procedures in place to handle them.
I believe the no win, no fee companies that are dealing on behalf of clients have led many payment protection insurance complaints.
The first PPI claim I received was a year ago and I didn’t arrange PPI – it was a life insurance policy – but it still took me several hours’ work to deal with the complaint.
I had my second PPI claim last week. Out of interest, I completed a dummy application on the PPI claim company’s own website.
All the answers given on the application are via drop-down boxes and are multiple-choice responses that lead the client. It doesn’t allow them to put in their own answers.
All the facts given were untrue and it was obvious the claims company had prepopulated the answers.
The claim this firm had sent me took me about four hours to deal with, never mind the additional stress.
I found an email on file from the client asking me to arrange the PPI cover so they will not win the claim.
But I’m still at risk of having to pay £500 in Financial Ombudsman Service fees if the firm disputes the claim rejection and takes it to FOS.
I will now have to wait about a month to see the outcome.
I blame the FSA and the MoJ for allowing PPI claim companies to trade.
Bob Riach, Riach Independent Financial Advisers
Equity release body will promote growth of the entire sector
I was interested to read the blog by Robert Sinclair, director of the Association of Mortgage Intermediaries, on Mortgage Strategy Online last week about the reform of Safe Home Income Plans under the new name of the Equity Release Council.
Sinclair argued that he was unsure how the ERC would prioritise its various roles and more importantly, how it will be a democratic organisation reflecting the diverse views of its proposed widened membership.
“Equity release is a regulated product via the Financial Services Authority,” he comments.
“It sets the rules on how the product can work and be sold. We pay a lot of money for them to get this right.
“I am not sure I want another body setting more rules and standards that can be used by the Ombudsman and courts to set much higher standards,” he adds.
But I would argue that the clear common goal of the ERC is the continued safe growth of the equity release sector – not giving favour to one set of members over another.
SHIP has been one of those rare things – a trade association that has genuinely improved matters and moved the industry forward.
If it means paying the regulator and a trade association for this to happen, surely this is money well spent.
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