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AMI voices concern over KFIs

The trade body is worried the rules covering the calculation of inducements could be misinterpreted, particularly the definition of what payments are regarded as material and must be disclosed.

It states confusion also reigns over the issue of packager payments. Current thinking suggests packagers are out-sourced processors of mortgage cases, working for either a lender or an intermediary.

The view seems to be that a lender will pay the packager for its out-sourced services and make a separate payment to the intermediary for writing the business.

AMI says that if this is the case, packagers will need to be aware that payments from lenders for outsourced work could attract VAT.

Sue Cox, business development manager at packager Bananas Inc, says: “We are currently taking advice on what business is classified as requiring VAT payment. There is a frightening number of brokers who do not seem aware of this and are not quite prepared for Mortgage Day.”

AMI has also issued a challenge to lenders to reveal what progress they have made with their KFIs, calling for them to publish test systems this month.


Fate of Miles review remains unclear

The review of longer term mortgages by Professor David Miles was published at the time of the Budget in March but there has been no feedback on the outcome of the consultation on the document. There was a muted response to a question raised at a discussion at the House of Commons last week, Financial […]

Freedom launches enhanced range of mortgage products

The range now includes a variety of new features. All prime products now offer an extended choice of interest rates up to 90% LTV, with the exception of buy-to-let which has one rate to 85% LTV. There are competitive discounted rates over one, two and three years to 85% LTV, on full status, self-certification and […]

MPs told of KFI concerns

At a discussion at the House of Commons last week sponsored by GMAC-RFC and chaired by Labour MP John McFall, the lender&#39s chairman, Stephen Knight, raised the issue and called for action. Knight says: “I think the FSA has done a fabulous job and agree with about 90% of what it has done but KFIs […]

Brokers to benefit from SLB commission shake-up

As it stands, if a client was to purchase an equity release product via a broker for about £200,000 and release £10,000 at the time of purchase, the broker would only receive commission on that £10,000 and not any amount released after that date. SLB plans to change this so that the broker would receive […]


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