The Association of Mortgage Intermediaries is calling for mortgage advice to be mandatory for most consumers, particularly first-time buyers, credit- impaired borrowers and those borrowing into retirement.
Last November, the FSA published an MMR consultation paper on distribution and disclosure and asked if it should continue to allow consumers to get a mortgage without advice.
In its response, the AMI says advice should be sought by most customers to avoid potential customer detriment but ack-nowledges there should be an opt-out for borrowers who do not require it such as professional investors.
In its response, the AMI says: “To ensure that potential customer detriment is kept to a minimum, mortgage advice should be the default route for all customers obtaining a mortgage. However, we acknowledge that not all customers who take out a mortgage need advice.”
The Council of Mortgage Len-ders and the Intermediary Mortgage Lenders Association believe customers should have a choice between advised and non-advised transactions. Imla’s response says: “Consumers should be given the choice as to whether or not they have advice. There are many borrowers for whom a non-advised sales process makes good sense and delivers a good outcome.”
Responding to the call for compulsory mortgage advice, the CML says there is “insufficient evidence of detriment to justify the policy approach proposed”.
If I Were You managing director Rob Clifford says mand- atory advice for some borrowers would be good but does not believe this should be across the board. He says: “It is long overdue for certain groups of consumers to get proper advice, not least because a big proportion believe they have been getting advice when they have been getting failed pitches and information-only from product providers. I agree with the AMI that it can be a very blunt instrument to make it mandatory for every group. There would need to be some carve-outs.”