UK Mortgage Compliance has warned house sellers to check their buyer's mortgage arrangements as two-thirds of brokers will not be authorised by Mortgage Day.
UKMC says about two-thirds of mortgage brokers have not yet applied for the authorisation they will need come November 1.
Time is running out for intermediaries who wish to be compliant by that date and the same is true for their clients, who may well find themselves without a mortgage broker part way through the homebuying process.
So far, fewer than one-third of mortgage brokers in the UK have applied to the FSA for authorisation to trade.
Pam Burnett, compliance consultant at UKMC, says that the situation is a time bomb for the mortgage industry and the house buying public.
She adds: “Sadly, mortgage brokers are sticking their heads in the sand on this one. They represent one of the last professional groups to face regulation yet most of them are doing nothing about it. They will have to move fast if they are to be compliant by Mortgage Day and thus remain in business.”
UKMC says it is imperative that house sellers make sure that their buyer's mortgage broker will be compliant, adding that this is a nervy time to be in the house purchase chain and sellers must try to avoid being left in the lurch by mortgage brokers who are unable to trade.
“Buying and selling a house is the most costly and stressful thing a person can do and between now and November is a critical time,” says Burnett.
“If mortgage negotiations span that crucial period and the intermediary is not compliant on November 1 clients will have to start all over again, which may mean losing both the property of their dreams and the fees they have already paid to their broker.”