In its reponse to the MMR, which has been published today, AMI says that the regulator’s proposals focus on a minority of consumers and have the potential to adversely affect the majority of responsible consumers.
In summary, AMI has called for:
- More consumers to have access to mortgage advice
- Lenders to retain ultimate responsibility for assessing affordability
- The FSA to not restrict higher LTV and loan-to-income products, so as to not limit equity withdrawal or apply unnecessary controls over debt consolidation
- Procuration fees to remain as a remuneration option and the decision on remuneration to be agreed between the customer and the adviser
- The FSA to recognise the fundamental differences between fast-track and self-cert mortgages and ensure that fast-track mortgages, which are appropriate for low-risk consumers, are not banned.
Robert Sinclair, director of AMI, says: “The vast majority of consumers have been well served by the mortgage market.
“We are concerned that the proposed changes, which will protect a small minority, will substantially impact on the choices of the vast majority of consumers.
“The regulator needs to be mindful of negative unintended consequences that regulation could have on a market still in a state of recovery.”
AMI wants to see the regulator do more to boost consumer access to advice, and says that flexible remuneration, including proc fees, should be retained.
The trade body agrees with the FSA’s proposal that lenders should be ultimately responsible for affordability, as they have access to classified client data that is not available to brokers.
AMI has also called on the regulator to distinguish between fast-track and self-cert, and recognise that all consumers do not require the same level of checks.
Sinclair adds: “First and foremost we need to think about how regulation will affect consumers.
” Appropriate controls are necessary, but consumers must not be penalised through an artificial limitation of their choices.”