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Regulation should be brokers’ creed

It’s time to break out the champagne – one year on and the mortgage industry has survived 365 days of regulation by the Financial Services Authority.

Was it baptism by fire? Many were convinced in the early months that the whole machine was creaking to a halt. Lenders were withdrawing from the market or suspending their online systems. Brokers were unable to download Key Facts Illustrations and confidence was at rock bottom.

But a year is a long time and even the most pessimistic, militant FSA haters out there must admit regulation has brought some positive changes for the industry.

Bringing consumers to the fore with the Treating Customers Fairly initiative has been a step in the right direction. The launch of a website this week dedicated to educating the public and debunking some of the arcane language surrounding mortgages is undoubtedly a good thing.

Yes, there are still major issues. Questions about the length and breadth of documentation, especially the Key Facts Illustration, must be addressed in the coming year as a matter of urgency.

But those harking back to the gentlemanly days of the Mortgage Code Compliance Board are a dying breed. Regulation has brought with it more respectability for the broking community. You only have to look at the negative image estate agents still have – cowboys and charlatans, unbound by either ethics or a set of rules – to see the positive effect it has had on the standing of mortgage brokers.

The FSA has taken time to effectively gauge the threats and risks concerning individual sectors. It has already outlined some of the concerns it has over the sale of sub-prime and equity release. It is also rumoured to be sharpening its axe for those who failed to hand in their Retail Mediation Activities Returns by the September 9 deadline.

But regulation should now be all brokers’ creed. The future is bright for broking, hand in hand with the FSA. Here’s to a good second year.

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