Robert Sinclair, director of AMI, says: “We cautiously welcome these initial proposals from FSA for the distribution of mortgage products. These proposals should lead to increased professionalism and competence across the industry.
“We welcome recognition by the regulator of the important role played by intermediaries in the mortgage process and how they should remain at the heart of the industry.
“With the creation of a level playing field for the industry the proposals may drive up the cost of banks delivering mortgage products direct.
“This would be good news for intermediaries who could see a rise in demand from lenders. And good news for consumers who value the independent advice they receive when applying for a mortgage.
“However, the regulator must be mindful of the impact of its entire proposals for the mortgage market. As such we hope they will provide an amalgamation of its conclusions in a final consultation paper before any reforms are implemented.”
It agrees that lenders should have ultimate responsibility for assessing affordability, as has always been the case.
It says the role of intermediaries in assessing affordability should be limited to checking whether the consumer fits within the expected parameters of the lenders’ affordability and product criteria.
He says: “However, mortgage intermediaries will continue to play a crucial role within the mortgage industry.”
Sinclair says it is concerned about service labels from other sectors being applied to the mortgage industry.
He adds: “We do not think this is appropriate to the industry and will continue to raise this issue with FSA.”