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Brokers give positive feedback to distribution paper

Paradigm Mortgage Services says attendees at its Mortgage Market Review workshop have given a broadly positive initial reaction to the recently published FSA paper on distribution and disclosure.

The workshop was held a day after the publication of the FSA’s paper and was designed to provide Paradigm members with information about the proposals to date, their impact for brokers, lenders and consumers, and how the industry was likely to react to the suggested changes.

Attendees were provided with an economic overview from Richard Froud, senior economist at Barclays; a lender’s view of MMR from Justine Gainer, national account manager at Northern Rock and the trade association take on the proposals from Robert Sinclair, director of AMI.

Bob Hunt, chief executive of Paradigm Mortgage Services, says: “It’s safe to say that all those members and speakers who attended our first Paradigm MMR workshop were broadly positive about the contents of the FSA’s Distribution and Disclosure paper. 

“Clearly, there are issues to address particularly for lenders around the potential cost of these proposals and their appetite to meet those costs and how this will be factored into their distribution strategies.  Certainly, the feeling in the room was that intermediaries could see an upturn in mortgage business because of the greater cost and resource pressures that lenders are going to be faced with.

“As our speakers outlined there is a raft of proposals to consider and the true impact of the MMR on all stakeholders has yet to be understood.  We are supportive of some measures whilst being of the same opinion as Robert Sinclair of AMI that the implications of European regulation have not truly been factored into the equation. 

” Also, given that there is already likely to be slippage in terms of the deadline for individual authorisation, plus there is no set timetable for MMR implementation, there is a danger that we have too much of an uncertain situation about what is coming and when.  It is likely that our summary of MMR will change as the MMR changes and this is why we intend to hold future workshop dates into next year so we are able to keep our members completely up to date with developments.”

Robert Sinclair, director of AMI, says: “There is no date yet for any part of the MMR’s implementation.  It may well be 2012 before any of this comes in and the FSA and Treasury certainly want to see a better housing market before they implement it. 

“There is also many other considerations which will impact on the MMR notably the European dimension.  For example, the EU has a very different take on the role of advisers and their importance than the FSA plus we are awaiting an EU Directive on both borrower and lender responsibility. 

“However, there is much to welcome in the latest paper and its proposal that all mortgage sellers will need to be qualified is positive news given that it will not just change the behaviour of those who work in banks’call centres and branches, but will also change the landscape in favour of brokers. 

“One worry is that we are not talking about the customer more in these proposals.  After all, who is on the side of the customer?  It is the adviser and the FSA should not forget this.”



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  • Dave 19th November 2010 at 4:06 pm

    It is to be welcomed that the FSA has removed some of the more ridiculous proposals in the original CP (such as the idea of prohibiting clients who exhibit high risks characteristics from obtaining mortgage finance) but there is still much left to debate.

    It still favours lenders disproportionately in many respects in my view.

    ALL intermediaries should study this latest document as a matter of priority and provide feedback to the FSA on any points they do not agree with – you only have to answer the questions that concern you – you don’t have to complete the whole thing.

    If we don’t make a LOUD NOISE about the aspects that are detrimental to our clients or our sector (intermediaries), then the changes could be introduced by default.

  • Pat Bunton 19th November 2010 at 2:55 pm

    FSA should be congratulated on CP10/28, they have clearly listened to sensible industry feedback and have outlined a pretty workable set of proposals that are based on common sense and fairness.