View more on these topics

KFIs via lenders will keep you safe

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&#39 offerings and how far they have come since the early days of sourcing packages. Playing devil&#39s 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&#39s 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&#39t written down, it didn&#39t 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.


Mortgage Next follows MI lead

MORTGAGE Next has followed the lead of Mortgage Intelligence by offering intermediaries the opportunity to join for free until October 31 when FSA regulation starts. Mortgage Next, part of Freedom Finance, says it is waiving monthly fees for all intermediaries who submit a successful application to become an appointed representative. They can also trade under […]

Northern Ireland price inflation is sustainable

House prices in Northern Ireland are growing at a modest and sustainable rate, compared with the breakneck rises seen in the rest of the UK. Prices grew at a “steady but unspectacular” 8.6% in the 12 months to April according to the latest quarterly house price index from the University of Ulster, with the average […]

e.surv completes roll out of integrated broadband network

Mortgage valuation firm e.surv has completed the roll out of a secure integrated broadband network in more than 300 locations across England and Northern Ireland. The firm says it is aiming to integrate the next generation of technology which will serve to further enhance its proposition. It says it is committed to investing more than […]

First Active welcomes its first customers

First Active, the new mortgage provider from the RBS group which launched this month with two low rate mortgages in England, Scotland and Wales, has welcomed aboard its first customers. Sold exclusively through intermediaries, First Active offers a two-year discount mortgage and a five-year stepped mortgage with rates that start low and stay competitive in […]


News and expert analysis straight to your inbox

Sign up