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FSA tells lenders to improve broker panel supervision

A number of lenders are not employing due diligence in the management of their broker panels, according to the Financial Services Authority’s Mortgage Fraud Thematic Review.

Speaking at the FSA’s Financial Crime Conference today, Edna Young, strategy specialist for financial crime and intelligence at the FSA, says the review identified weaknesses in lenders’ relationships with both solicitors and brokers.

She says while firms are now more aware of the risks involved in third party panels, weaknesses remain in due diligence on third panels.

For instance, some lenders were found to have as large a panel size of brokers and solicitors as they did before the financial crisis when volume levels were at their peak.

Young says: “Some brokers on lenders’ panels were no longer in practice, and some firms only used the FSA register to make checks on brokers, but this does not give enough information.

“Some lenders use networks to manage their broker panels, but not all took sufficient steps to check the networks and therefore had no information on the brokers on their panels.”

She also notes that some lenders use regional sales managers to manage relationships with brokers, but points out these managers can be incentivised almost entirely by sales targets.

       

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  • mic2002 22nd June 2011 at 12:11 pm

    Watch what happens next..lenders will start taking brokers off panels to reduce the numbers just to be seen to comply.Same as some did with solicitors – well nigh impossible to get back on.The FSA have made a clear link between volume and size of panels.

  • Derek Frost 22nd June 2011 at 11:53 am

    I wouldn’t normally respond, but even I find this latest soundbyte construction amazing. If lenders can’t rely on the regulator’s accreditation drawn from the ‘TCF’ & ‘GABRIEL’ then we are truly wasting not only our regulatory fees but our client’s time when describing the hoops we have to go through to be in practice for them anyway!

  • AJ 22nd June 2011 at 11:52 am

    Who tells the FSA to Improve the realtionship with its customers (Brokers) who pay them large fee’s each year ? Why is the FSA being paid so much money to then take it out on Brokers for their own failings. The sooner they are shut down the better for all concerned.

  • Kop-AJK 22nd June 2011 at 11:45 am

    Edna- Get off our backs! Try policing the lenders with their in house advisers fast tracking customers mortgage applications NOT US BROKERS- PS save money move out of Canary Wharf to cheaper premises and sell of the huge art collection hanging on the walls-Stop wasting our money!

  • Kop-AJK 22nd June 2011 at 11:45 am

    Edna- Get off our backs! Try policing the lenders with their in house advisers fast tracking customers mortgage applications NOT US BROKERS- PS save money move out of Canary Wharf to cheaper premises and sell of the huge art collection hanging on the walls-Stop wasting our money!

  • George Williamson 22nd June 2011 at 11:28 am

    Edna Young – it is YOUR job to police us Brokers, that is why I pay you a huge annual fee. If you are not up to the task, then please resign and get the FSA to appoint a person that will do what they are paid to do.

    Your suggestion that lenders manage panels of Brokers & Solicitors is a duplication of effort and also has knock on effect for competition.

    Stop faffing around creating extra work for everybody that is not required – just do your job properly and we will have a much more EFFICIENT system.

  • Robin 22nd June 2011 at 11:25 am

    So being regulated by the FSA is no test of the standing of a firm/person. Are they just washing their hands of all responsibility for doing their job?