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&#39FSA underestimating move for direct rule&#39

The Mortgage Code Compliance Board believes that the FSA could be significantly underestimating the number of mortgage brokers applying for direct authorisation.

MCCB head of communications Brad Baker says the feedback he has had from the board&#39s 12,000 members indicates that the FSA will get far more than the estimated 7,000 applicants.

A recent seminar organised by the MCCB to help members adapt to the changes that mortgage regulation will bring to their businesses was attended by representatives from around 1,600 firms which Baker warns could indic-ate the number of firms which are leaving it to the last minute to apply for direct authorisation.

He believes many firms are still considering their options and many will eventually write off the £1,300 fee they pay to the FSA for direct authorisation status in favour of joining a network.

FSA spokeswoman Jackie Blyth says the regulator is making progress on the applications but is encouraging every firm to meet the April 30 deadline to ensure they will be able to carry on working from day one of regulation.

The FSA&#39s latest figures show that at March 31 it had received 4,229 applications for direct authorisation and 5,945 requests from mortgage firms for application packs.

Baker says: “I think the FSA may be underestimating the number of firms who will go directly authorised. Firms are safeguarding themselves because some networks have not finalised their terms.”

Effective Financial Planning adviser David Ellingworth says: “The national shift does seem to be towards direct authorisation. I think the timescale that the FSA has set is ambitious and I predict a logjam in October.”

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