We now have the building blocks to work with and I believe they provide a much more stable foundation for the industry than the regulator’s previous thoughts.
They are largely a victory for common sense, guarding against the risky lending practices of the past with better protection the only effect on most borrowers.
For that we should be grateful and should applaud all those who worked to make the regulator listen and adjust proposals founded on poor knowledge.
IFAs and mortgage brokers might look positively on the proposal to remove the non-advised sales process, and the requirement for all sales which involve spoken or other interactive dialogue with the consumer to be advised.
If the cost, direct or associated, of telesales activities rises for the big banks – including the need for a level playing field on qualifications – then their dependence on intermediated sales to secure business appears more assured.
The flip side is that its proposals to give lenders more responsibility in verifying income and assessing affordability may involve them more in the application process, which could, as the FSA puts it, “lead them to prefer direct sales”.
With this level of detail and the sheer scale of potential changes, only time will reveal the true outcome and the unintended consequences of the MMR.