Not since the halcyon days of Ian McIver versus Richard Griffiths have I been more interested in watching a debate unfold, as Trigold and Mortgage Brain lock horns over who was the first sourcing provider to announce a launch date for FSA-compliant software. Mortgage 2000 has also entered the fray, expressing surprise at the various announcements regarding who was first.
Having attended seminars run by both Trigold and Mortgage Brain I was encouraged by both companies' offerings and how far they have come since the early days of sourcing packages. Playing devil's advocate, however, I raised the same question at each seminar and was left disappointed but not surprised by the answers. I asked if they would be taking responsibility for the accuracy of the illustrations produced via their software. Unfortunately the answer was no from both camps because the apparent costs of offering a 100% accuracy guarantee clearly outweigh the benefits of offering a cost-effective FSA-compliant solution.
In Mortgage Strategy November 3, 2003 I covered the fact that advisers (or their principals if appointed representatives) will ultimately take responsibility for the advice provided. Most importantly this includes the accuracy of the illustrations supplied. Although the various sourcing options currently on offer are FSA-compliant in format they are not guaranteed to be within the given FSA tolerance limits. Of course the first software provider to announce guarantees on the accuracy of its illustrations will soon gain the interest of advisers and principals alike who will no doubt be rushing to sign up to the proposition. It is encouraging to learn that both Mortgage Brain and Trigold have confirmed they could make verifiable product information available to rival systems in the interests of giving the industry accurate and compliant data.
As an aside to this I have also been looking at the technology propositions offered by individual lenders. Under the new regulations, illustrations provided by lenders must be accurate. There are not even the tolerance levels as granted to mortgage firms. BM Solutions, for example, has stated that it will offer assurances to intermediaries who deal with it directly through its website that they will receive totally accurate Key Facts Illustrations. If this is to be the case then it certainly makes sense to use software packages to continue to source mortgages.
However, where possible supply an illustration that has been provided via a lender's website. This will regularly monitor the information your software system provides and you should identify anomalies – advisers should be aware they then have a responsibility to rectify any faults uncovered. If you spot an inaccuracy, email your software provider immediately (and keep a hard copy – remember if it isn't written down, it didn't happen as far as the FSA is concerned).
Again using BM Solutions as an example, around 90% of its business is now submitted electronically. Indeed some lenders, for example Abbey and Alliance & Leicester, even incentivise advisers to complete business online with procuration fees on average 0.1% higher than for business submitted on paper. The FSA too advocates the use of online technology with discounted rates for authorisation requests received online. Rather worrying for the technophobes among us, an increasing number of lenders are favouring online business channels. This is good news for advisers since the more lenders invest in technology, the more will provide KFIs via their websites. This means you are safe in the knowledge that when you have provided a lenderproduced document, it will be FSA-compliant and 100% accurate.
I would advocate you speak to lenders and register yourself to submit business online as quickly as possible (for obvious reasons you are well advised not to leave it until October 2004) as you may well find yourself with agency number issues to overcome before you can begin to submit business in this way. Despite having a history of providing paper-based applications and also an established agency number, transferring to online sometimes entails certain teething problems with individual lenders.