View more on these topics

FSA points out common mistakes by brokers in application forms

The FSA says it has identified a number of common mistakes firms are making when filling out their application form for direct authorisation.

The regulator says the mistakes are causing delays in its processing of applications and it will be posting some practical tips on its website this week to help firms avoid these mistakes in future.

The FSA says although it seems obvious, firms should read the forms carefully before they begin completing them, including the instructions and guidance. It says brokers should look up cross-references and most importantly, should not try to complete the application in a hurry. It says most mistakes can be easily avoided if advisers take their time and read through the answers before submitting the application.

Questions on the application where firms seem to slipping up include section H &#45 Compliance with our regulatory requirements, question 53. Firms that do mortgage and general insurance business but only hold client money for their mortgage business should cross &#39f&#39. On the supplementary information sheet they should advise the FSA they do general insurance business but do not hold client money for this part of their business.

For question 54, of the firms that have told the FSA they will not be holding client money, most of them will need a requirement to reflect this. The requirement prevents firms from holding client money and is consistent with the declaration that they do not hold client money. It is recorded on the public Register so that consumers can check whether firms are permitted to hold their money before they hand money over to them. Having the requirement on a firm&#39s permission will also reduce the need for the FSA to ensure that firms have systems and controls in place to comply with our client money rules.

In Section I &#45 Application fees, mistakes are occurring because firms do not notice the &#39000&#39 outside the boxes. The result is they inflate their income by thousands of pounds. If the income is £500,000, firms should complete the box with &#39500&#39. If the firm inserts 500,000, the fee will be calculated on an income of £500m.

Recommended

NatWest in B2L criteria row

Brokers have been infuriated by changes NatWest has made to its buy-to-let criteria without informing them. The lender, part of the Royal Bank of Scotland group, had previously calculated how much clients could borrow by yield ratio. If there was any fall in this it would look at a client&#39s individual circumstances to work out […]

Mortgages PLC appoints new head of credit

Mortgages PLC has announced the appointment of Jim McCallum as head of credit. McCallum has been with Mortgages PLC for two and a half years, where he has been acting head of credit for the last eight months. Prior to this he worked for 34 years at the Royal Bank of Scotland where, for 23 […]

MIAS launches its proposition to brokers

The Mortgage Intermediary Alliance Scotland will launch its proposition to mortgage intermediaries in Scotland today at a presentation in Edinburgh to over 100 guests. The alliance, established to raise the profile of mortgage intermediaries in Scotland, aims to establish a Kite Mark, revealed in Mortgage Strategy magazine for the first time this week, which it […]

MPC will have to perform a balancing act

Swap rates fell slightly last week but not enough to affect any lender rate decisions. • One-year money is down 0.04% to 4.75%• Two-year money is down 0.05% to 4.94%• Three-year money is down 0.02% to 5.06%• Five-year money is down 0.02% to 5.17%Last week&#39s raft of fixed rate increases had been expected – Halifax, […]

Life after the CML

By Roy Armitage, head of credit at LendInvest Last month saw three-quarters of the membership of the Council of Mortgage Lenders (CML) vote in favour of plans to create a super-trade body, which would see the CML merge with the likes of the British Bankers’ Association and Payments UK. There is little room for misty-eyed […]

Newsletter

News and expert analysis straight to your inbox

Sign up