Two of the Industry’s key trade bodies have lambasted The Financial Services Authority for the unsurprising outcome of the second stage of its Mortgage Effectiveness Review.
In findings published last week, the FSA revealed that brokers are central to the sub-prime and lifetime markets.
The review also shows that sub-prime and lifetime mortgage consumers see Key Facts Illustrations as useful for checking the details of deals but not for comparing products. Kate Davies, senior policy adviser at the Council of Mortgage Lenders, says: “It’s not surprising that borrowers in these marketsuse KFIs more to check information than to shop around.”
And Peter Williams, executive director of the Intermediary Lenders Association, says: “We welcome the publi- cation of the second stage of the review although its findings are unsurprising and hardly take the industry forward.
“Almost all sub-prime mortgage sales are via brokers, who are clearly best placed to find deals taking borrowers’ circumstances into account. It’s hardly surprising that customers rely on brokers’ advice and expertise.”
In its report, the FSA also pledges to review companies’ arrears management practices, having found a number in breach of its rules.