The FSA published its long-awaited consultation paper on regulated mortgage sales last Monday.
Sarah Wilson, director of the FSA's high street firms division, says: “We want to make sure that consumers get clear comparable information on mortgages and that, where they get advice, they are recommending a suitable mortgage. We aim to introduce a regime that achieves this goal in a proportionate, cost-effective fashion.”
CP146: The FSA's approach to regulating mortgage sales is the first of a series of papers that will set out FSA proposals for regulating mortgage and general insurance sales. Proposals are of two kinds, some relating to firms' conduct during a mortgage transaction and others relating to firms' ongoing status as an authorised firm or appointed representative.
Among the report's main features are proposals that introductions to any authorised firm, whether independent or otherwise, will be exempt from regulation, while mortgage clubs and packagers will not need to be authorised. Broker packagers and correspondent lenders will, however, require authorisation.
CP98 plans for pre-application illustrations will remain but in a shorter format than originally envisaged and quotes to provide customers with personalised product information that is not in the prescribed format of the PAI will be allowed. Both moves are steps towards a system to enable customers to compare UK products to those in the rest of Europe.
Regarding lenders, the use of credit-reference searches by lenders will not be restricted. The FSA has decided against new rules on the controversial cooling-off period, while 'lifetime mortgages' are introduced – the new name for equity release products.
Visit www.mortgagestrategy.co.uk to find out what the FSA wants to know from you.