Speaking at the Moneyfacts conference last week AMI director Chris Cumm-ings said the mortgage industry is a low-risk, low financial loss industry although mortgage regulation has cost around £136m. He asked the FSA not to “trip up firms trying to cope with the spirit of regulation”.
The AMI expects mortgage regulation to have an impact in several ways. In a post-Enron environment, audit requirements will place more of a burden on big intermediary firms, said Cummings.
The success story of regulation, according to Cummings, is training and competence which he says should deliver a better trained market place helping mortgage intermediaries on to a path of professionalism.
Cummings pointed out that the FSA has sent out 300 warning letters to intermediaries who have not been awarded regulatory status.
He warned that these intermediaries must explain to their customers that they can only work on transitional time. They must also be aware that this may have an impact on their PI costs.
The mortgage market has seen a rise in networks with a total of 78 new ones entering the regulated environment. Cummings said there is a total of 110 mortgage networks and predicts there is bound to be consolidation in the industry, mainly because networks are very expensive to run and a strong financial background is essential.
Cummings said: “People in the mortgage community are the good guys. I ask the FSA not to destroy the trust in our industry. Let us look at building relationships.”