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Pre-application illustrations here to stay

The FSA&#39s consultation on regulating mortgage sales confirms that controversial pre-application illustrations are here to stay.

The need for a personalised PAI for each mortgage applicant was originally proposed in CP98. In its latest CP146 consultation, the FSA says: “We consider that the principle behind this approach to product disclosure still applies.

“This is that consumers need to be provided with product information at an early stage in the process, in a consistent format, to help them compare and contrast different products &#45 and thereby facilitate shopping around.”

The FSA proposes a number of changes to PAI content to reflect the extension of the regulatory regime to include advice and arranging and mock-up PAIs drafted by 14 lenders and two intermediary firms.

CP146 includes an eight-page PAI template for consultation.

The FSA has made some concessions after PAI proposals were criticised in feedback to CP98 for producing additional paperwork. For instance, firms will only have to produce a PAI for a repayment mortgage when a customer expresses no preference between repayment and interest-only vehicles.

The FSA will back up its product disclosure requirements with comparative tables for mortgages &#45 due to go live in October 2002.


World Cup knocks housebuilding figures

The latest housebuilding figures show that fewer dwellings were started this summer than last. Some 13,400 dwellings were started in June 2002, compared with 17,000 in June 2001. Some 46,600 starts were estimated in the three months to June compared with 48,800 in the first quarter of 2002. The low figure in June is likely […]

Mortgage debt collection to be regulated

Debt collection in relation to mortgages will be regulated under the FSA, as requested by respondents to the Treasury&#39s consultation paper. The Treasury says the regulated activity of &#39administering&#39 a regulated mortgage contract expressly includes “taking any necessary steps for the purposes of collecting or recovering payments due under the contract from the borrower.” This […]

Platform offers new fix

Platform Home Loans is launching a new range of market leading fixed rates starting from 4.99% and fixed until October 1 2003. The new fixed rates are: Up to 65% LTV = 4.99% Up to 75% LTV = 5.49% Up to 85% LTV = 5.99% Up to 95% LTV = 6.99%The fixed rates are available […]

First Title appoints new business development director

First Title, provider of title-related services, has announced the appointment of Phillip Oldcorn as underwriting and business development director. Oldcorn was previously involved in developing First Title&#39s commercial property title insurance services. First Title, a wholly owned subsidiary of the First American Corporation, counts Halifax, Alliance & Leicester, GMAC-RFC, Intelligent Finance and the Woolwich among […]

The curse of long-term cash

Trevor Greetham, Head of Multi Asset at Royal London Asset Management, reveals why clients should be seriously concerned when short-term holdings of cash turn into a long-term investment. There is nothing wrong with holding wealth in the form of cash on a short-term basis. For many people capital stability is important and access to ready cash […]


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