NEWS REGULATION
Comparison sites may fall foul of MMR advice rules
SAMUEL DALE
Comparison websites could face a major shake-up as a result of the Mortgage Market Review proposal to ban non-advised sales. The final MMR consultation paper
published in December proposes that the majority of interactive mortgage sales must be advised. Financial consultancy Bovill is
advising brokers and lenders on the MMR’s impact on their business. Bovill consultant Kate Robinson says if comparison websites ask con- sumers questions it could be con- strued as interaction so must be advised. She says: “The consequences could be serious for firms that are currently inadvertently operating an advice service without the cor- rect Financial Services Authority permissions. “They will have to cease trading until they have sought a variation in
TECHNOLOGY
Mortgage Brain’s ‘find a broker’ app is out this month
NATALIE THOMAS
Mortgage Brain plans to launch a mobile app with a ‘find a broker’ fea- ture this month. The app is free of charge for con- sumers and will have a mortgage search facility which will direct users to their nearest broker. Mort- gage Brain users can be featured on the app free of charge. Mark Lofthouse, chief executive
officer of Mortgage Brain, says: “There are few if any mortgage sourcing systems for mobile devices and there certainly aren’t any that have the facility to find a broker. “What we are doing is a big adver-
tisement for every broker in the country. We look at it as the Yellow Pages for them.” The app will initially be launched
for the iPhone and then on Android devices and iPads in a few months. SEE COVER FEATURE, P20
4
permission from the FSA, which is not an overnight exercise.” She says aggregators and com- parison websites will have to assess whether a mortgage is appropriate based on the consumers’ needs and circumstances for all sales.
KATE ROBINSON MMR WILL HAVE CONSEQUENCES
She adds: “This will be costly and time-consuming, and may mean agg re ga - tors and comp arison websites drop out of the market.” Robinson says the proposals could also
deter innovation and competition. Justin Rees, director of market- ing and partnerships at Lead point, agrees that comparison websites looking to enter the market could be deterred by the new rules. He says a number of websites
REGULATION
Let mortgage prisoners borrow more, says AMI
NATALIE THOMAS
The Association of Mortgage Inter- mediaries says mortgage prisoners should be allowed additional bor- rowing of up to 10% as long as it is in their best interests. The Mortgage Market
Review states lenders can waive some of the regulator’s affordability rules for mort- gage prisoners – for example, borrowers in negative equity or those who have self-certi- fied – only if it means no additional borrowing or higher monthly payments. But AMI director Robert Sinclair wants the FSA to allow these indi- viduals to borrow up to an additional 10%.
He says: “If a consumer wants to
move to a fixed rate mortgage to ensure greater certainty about their expenditure, even if it means an
increase to their monthly repay- ments, it may be in their best inter- ests to do so.
“There may be circum-
ROBERT SINCLAIR URGES FLEXIBILITY FOR BORROWERS
stances where a small am - ount of additional borrow- ing is needed to make a house move viable, such as to cover Stamp Duty and estate agent and removal costs.” Sinclair adds: “Such flex- ibility should be left for the lender to determine as part
of its lending policy but we would consider a 10% tolerance on both the additional borrowing and the monthly cost of borrowing to be a reasonable amount.” He says the scale of the mortgage prisoners problem will only be fully exposed when the base rate rises and consumers try to switch mortgages.
MORTGAGE STRATEGY ONLINE
Top 10 articles online this week
1Nationwide and Lloyds cut 2Brokers slam NewBuy 3FSCP slams proposed ban 4Co-op Bank to increase SVR 5Sophie Hall joins Avelo as 6FSA carried out 20 police 7Taking the long view 8ASA bans advert from
proc fees distribution on non-advised sales from 4.24% to 4.74% head of intermediary dawn raids in 2011 payday loans company
9CML fights for non-advised 10HSBC approves £4.9bn of
sales in MMR response mortgages in Q1 MORTGAGE STRATEGY April 9, 2012
operate as glorified best buy tables rather than conducting proper com- parisons on mortgages as is done for car or home insurance so they may not be affected by the MMR rules. But he adds: “There are a number
of companies developing mortgage comparison tools and the new rules could stop them from developing their online solutions further.” Frank Eve, managing director of
Frank Eve Consulting, does not think advice will be needed and that comparison websites could provide an execution-only avenue for lenders. He says: “I would expect the pro- posals to allow comparison websites to provide an execution-only vehicle for lenders if they can get connec- tivity to lender decision engines.” Eve adds that the MMR will have
unforeseen consequences and it will take time before the market is aware of what the rules mean in practice.
www.mortgagestrategy.co.uk STRAW POLL
NewBuy should be open to all brokers
The majority – 74% – of Mortgage Strategyreaders think lenders should not limit their broker panels for NewBuy Guarantee deals. Only 26% believe lenders are
right to do this. Nationwide currently offers
its products to all brokers, but Barclays only offers them to a selected panel. And NatWest is offering its NewBuy products direct only. This week, Mortgage
Strategyasks: “Do you expect more lenders to cut proc fees?”
ARE LENDERS RIGHT TO LIMIT THEIR BROKER PANELS FOR NEWBUY?
YES NO
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