The FSA does listen and in the past it has contacted me to discuss points made in my Mortgage Strategy articles. Because of these discussions I believe it wants to help those it regulates, even if its accountants do not understand the economic strains facing small firms.
Even regulators have to provide value for money, so I was delighted to see the FSA launch a series of free one-to-one surgeries where firms can ask it questions about regulation.
It has only announced three dates so far but it appears it wants to offer more. For example, the FSA’s website asks firms in Scotland to email it if they’re interested in Scottish surgeries.
At a time when one can’t pick up a trade magazine without reading about brokers being bashed for one issue or another, why wouldn’t they? Just look at the headlines about brokers not hitting Treating Customers Fairly deadlines, their involvement in mortgage fraud and their failure to understand self-cert income plausibility tests – the list goes on. What does the FSA expect firms to do in these areas? Well now they have the chance to get the news straight from the regulator’s mouth.
The surgeries come at a significant time as the FSA has just released the findings of the second stage of its Mortgage Effectiveness Review. It looks at sub-prime and lifetime loans, the former a significant business area for most brokers before the advent of the liquidity crisis.
Headline writers have concentrated on the review’s interest in consumers being treated fairly over the lifetime of their mortgages, including arrears. But the report also covers issues surrounding adverse applicants not being in a position to shop around thanks to so many deals being withdrawn. As a result they are now limited to those firms identified by brokers as willing to accept their business.
Responsible lending practices will come under the FSA spotlight next, particularly in relation to affordability and self-cert, plus the quality of advice consumers receive.
Brokers have their work cut out finding reasonable replacements for borrowers’ fixed rate products thanks to lenders reducing their ranges and tightening their criteria, but now’s not the time to lose focus. The recent TCF deadline was only one milestone, so I would encourage all brokers to use the regulator’s surgeries.