With the deadline for submissions to the Financial Services Authority’s Mortgage Market Review now passed industry bodies are drawing their battle lines in terms of influencing the shape of the industry in the new world.
Top of the agenda is an attempt to ring-fence the fast-track process and make it distinct from self-cert. The latter is clearly in the regulator’s cross-hairs and unlikely to make it through the review process alive.
Hopefully, common sense will rule and we won’t see the fast-track baby thrown out with the self-cert bath water.
Fear of the unknown stalks the industry but while there will be changes for advisers – individual regulation has already been announced – I do not believe we are looking at the mortgage equivalent of a new ice age.
Of pressing concern to brokers is how the FSA will treat the relationship between lenders and distributors, as it is likely that lenders will be held responsible for affordability.
Lenders are bound to look even more closely at their distributor relationships and demand the highest standards from those they deal with.
Although this is not something to be feared it is likely to shake a number of distributors. In the past lenders have focussed on distributors in terms of product choice but processes that lead to mortgage advice are likely to be under the microscope from now on.