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On the beat

As we edge closer to Mortgage Day, I am concerned by some of the signs I am seeing.

In June I suggested there was the potential for a major loss of practitioners. However, this close to Mortgage Day I did not expect the situation to be so acute.

Last week&#39s frank admission by a network that it had failed to get close to a critical mass of appointed representatives was a chilling sign of low application numbers. Back in May the numbers looked to signal a trend. The numbers of direct applications to the FSA were low – much lower that most commentators had forecast. The assumption was that those that had not applied directly would join a network. There was always the understanding that some would leave the industry, but the numbers missing are beginning to look more like a haemorrhage than a trickle.

We have all read dozens of articles and direct mail promotions using phrases like &#39the clock is ticking&#39. But there is still time and I urge all those who have not yet made their decisions to do so now. Not to do so will have long-lasting effects on your clients and your future business success.

Those who remember the regulation of investments in 1988 will recall the rush of applications on the final day. This time there are no such dispensations. I would like to be surprised and see a deluge of applications in the next week but fear the worst.

The low level of applications also gives networks problems. They must meet their forecasts for membership to offer a viable network proposition. History might show there were too many networks on offer.

Those that leave the industry will create a vacuum that could be hard to fill. Customers could be left with a severely restricted choice in mortgage products. This might lead to an unexpected bonus for lenders with branch distribution. Such lenders could mop up customers unable to find a mortgage intermediary. But what choice is there for customers buying a mortgage via that distribution channel? Whole of market? Definitely not.

I risk sounding like one of those direct mail letters but if you have not yet made your decision, delay no longer. It will be a criminal offence to sell mortgages without the necessary regulatory clearance and if you think you can run your business on non-regulated lending, guess again.

We owe it to our customers to present a unified front

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