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FSA calms pre-N4 proc fee worries

The Financial Services Authority has calmed industry concerns over the payment of proc fees on pipeline mortgage cases started before Mortgage Day but completed afterwards to brokers or networks which fail to get authorised by October 31.

Lenders such as HBOS subsidiary The Mortgage Business were worried they might fall foul of the regulator if they paid a proc fee to advisers who placed the case before Mortgage Day thinking they would get authorised but then finding out otherwise.

But the FSA says that as long as the work was done before October 31, the proc fee payment is a contractual issue between the lender and the other parties rather than a matter for the regulator.

FSA spokesman Robin Gordon-Walker says: “If the work was done before Mortgage Day the question of the proc fee is a contractual matter. The fact that it is paid after Mortgage Day is a matter of invoicing and would not be caught by us.”

TMB managing director Bill Dudgeon says: ” I welcome this clarification from the FSA. It seems a sensible approach – I could not see what lenders could do other than pay for work that has been done.”

BM Solutions says the FSA&#39s stance was outlined in MCOB transitional provisions. The FSA states MCOB applies to regulated mortgage contracts entered into on or after October 31 but variations to such contracts after that date may be subject to the Consumer Credit Act 1974.


One in two homeowners will remortgage after 1% rise in base rate

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Japan Economic Insight

James Dowey, Chief Economist, and Paul Caruana-Galizia, Economist

The conventional wisdom is that following a roughly 50 per cent rise in the stock market in 2013 in Yen terms, the Japan trade is over and done*. So the story goes, those big gains were due to a one-off boost from quantitative easing (QE) and a depreciation of the Yen — policies that one should think of as a palliative to Japan’s economic weakness, but not a cure. Rather the cure, and by implication the necessary condition for a longer-term investment case, is deep structural reforms — a painstaking re-weaving of Japan’s economic and social fabric, no less. The story continues: this is a much tougher test than launching a blast of QE, and one that prime minister Shinzo Abe, although well intentioned and well supported by the public thus far, is likely to fail. Stick a fork in Japan, it’s done…continue reading


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