According to The Professional Mortgage Network many would-be ARs are making a serious mistake by committing to just one network, particularly as PMN believes that as many as 20 networks won't be in a position to be offering full network facilities to members on Mortgage Day.
Dale Knight, PMN managing director, says: “Many mortgage networks simply won't be able to offer a full suite of services to members come Mortgage Day. The FSAwill impose such draconian measures on them because their systems and infrastructures don't meet the regulator's benchmark criteria that it will be impossible for them to start trading.
“That's obviously bad news for the networks concerned. It's also going to be extremely bad news for any AR who has tied their colours to a network that doesn't pass the FSA test. These ARs are effectively going to be out of business for a considerable period unless they have a contingency plan.”
Knight adds: “My recommendation is that anyone seeking AR status through a network should submit applications to at least three networks, including one of the big names. At least then the ARs back will be covered if their preferred choice doesn't make the grade. I have no doubts that failing to have a contingency will cost an AR dear in the final analysis.”
PMN believes many networks will fail to meet strict FSA requirements at the point when the regulator makes a physical visit to the premises of the network. This unsolicited interrogation is known as an arrow visit. PMN has established that all new mortgage networks will be subjected to an arrow visit.
Knight concludes: “Many networks continue to fail to heed the FSA when it says they will only allow fit and proper organisations to become authorised networks. Many networks are crowing just because they have received an MTA letter. The truth is it is these networks that are at most risk. They have put a bit of effort in getting an MTA letter and are now relaxing, thinking the hard work is done. They're in for a rude awakening when the FSA comes calling.”