MIp6-7_1209:MI 12 Jan 24/11/2009 16:21 Page 2
6| Questions from Hell
Questions
from hell
This month’s Questions from Hell tackles
all your mortgage and GI regulatory
queries courtesy of Bill Warren
T
he mortgage industry has most perhaps do not have the prescriptive detail FSA’s responsibilities makes a great deal of
recently has been digesting the behind them, allowing interpretations to sense both from the consumer and the
potential implications of the become vague and often abused for market intermediary perspective. The consumer gets
FSA’s publication of their share and commercial gains, all of which is the greater protection and the intermediary
Mortgage Market Review well known to those steeped in the mortgage the potential simplification and therefore cost-
(MMR) document DP09/3. market in recent years. The real differential savings involved in working basically to one
perhaps now is that, in the context of these set of rules. Whether those working
A select number of proposals have two activities, it is clearly stated the lender’s exclusively in the second-charge market place
dominated both the national and trade ultimate responsibility to ensure that income would agree with me of course is something
press due, as you would expect, to their is evidenced and affordability accurately else, but the broker involved in both activities
severity and far-reaching impact upon the assessed in line with the proposed new rules. I think would react positively to saving money
mortgage industry generally and the What has become redundant rather than especially.
intermediary community in particular. banned is the description self-certified. The Mortgage Market Review is a
Much has been said about the proposal to In November at this year’s Mortgage discussion paper so the content and proposals
ban self-certified mortgage loans and Business Expo at Olympia, Lesley Titcomb, the can still be changed if the FSA are convinced
introduce more stringent affordability FSAs’ Retail Firms Director and small firms by the responses from the mortgage industry.
checks and no surprise that this is reflected champion, made it clear that what the FSA has While many firms are members of the
in the questions I have received. said should happen is that potential Association of Mortgage Intermediaries
borrowers’ income must be verified by (AMI) who will respond fully to the paper, it
Intensity sensible and pragmatic means which the FSA remains critical that individual firms and
In relation to both of these specific proposals fervently believes can be done. The FSA are individuals from those firms do actually
it could be argued that the only actual change not stipulating how this should be done but respond, even if it is to just a very few of the
proposed is the intensity (a very ‘in’ FSA word that it must be done and there is subtle questions rather than all 33. This is a major
currently) and supervision of the lender’s difference I believe. review as I am sure everyone knows and the
affordability checks to support responsible more firms and individuals that respond the
lending and to ensure that borrowers can Recommendations better, as this is most likely to shape the
actually afford the loan repayments involved. Adding in the recommendation to add mortgage compliance arena for the next three
Existing MCOB rules require this but they second-charge loans and buy-to-let to the to five years.
December 2009 Mortgage Introducer www.mortgageintroducer.com
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