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Moneynet suspends mortgage brokers

The move comes as concern grows for thousands of home buyers who could lose out on their property transactions as the Mortgage Day deadline looms.

 

The initiative by Moneynet – which has itself won full FSA approval to arrange regulated mortgage contracts – reflects concerns that many UK brokers will not be compliant under the watchdog&#39s strict regulations.

 

According to FSA sources, less than a third of all mortgage brokers are geared up to trade under the rules which means that hundreds of thousands of homebuyers could be left high and dry in mid-transaction.

 

Richard Brown, Moneynet chief executive, says: “This is a potential disaster waiting to happen for many purchasers and sellers. We are in the middle of what is traditionally one of the busiest times of the year for mortgage transactions and we learn that the majority of mortgage brokers have not yet applied for authorisation.

 

“This inevitably means they will be required to cease trading on October 31. The consequences for homebuyers and sellers could be appalling, with many applicants having to start the entire mortgage process again.”

 

Along with the obvious fears for consumers, Brown says that the wider mortgage market, already struggling on the back of the recent base rate rises, is likely to suffer a considerable body blow.

 

He urged consumers to check that their broker has the necessary authorisation in place so as to be sure of completing the mortgage transaction uninterrupted.

 

Brown adds: “Frankly, the mortgage industry cannot afford to lose clients at this critical time of year. Those brokers that have not yet applied for authorisation are unlikely to have the necessary permission in place to trade after October 31, even if they apply now.”

 

A spokesman for the Council of Mortgage Lenders today admitted that it had serious concerns regarding the apparent level of apathy among brokers.

 

The spokesman says: “Around 50% of all mortgage activity is conducted through brokers, and we are aware that many of them have been dragging their feet in the face of this impending new regulation. Any brokers that have not so far taken action would be advised to do so immediately.”

 

 

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