At this year’s FSA Mortgage Sector Conference, CML head of policy Jackie Bennett read director general Michael Coogan’s speech, which accused some smaller intermediaries of being “salesmen” and called for tighter and stricter regulation for mortgage brokers.
But brokers have reacted angrily to the accusation. PMS managing director John Malone said: “That is just not fair. The lenders created the distribution model, they paid the brokers about 300 to 600 per cent more than they would on a regular loan.
“It’s convenient for the CML and the FSA to talk about how it is the brokers’
fault, it’s scary. They chose the 2 per cent commission, so it’s their job
to make sure it will be appropriate for the borrower.
“The lender chose excessive interest for the loan, as the lender knew the
risks; that’s why they charged 3 per cent more, they understood the risk.
“This could make me scream at times. Intermediaries are being beaten up over this, and OK there are sections of the intermediary market that deserve to get beaten up, but the blame shouldn’t be put on a lot of the hard working, decent intermediaries out there.”
Ami director general Chris Cummings said: “We worry about a market that consolodates too quickly as that doesn’t help consumers. The lifeblood of our industry is smaller intermediaries and networks are made up of smaller int. I am not as interested in what the CML have to say, if they think by clustering intermediaries they can exert some regulatory power over them, that worries me hugely. We are either regulated by the FSA or we are not regulated, being regulated by lenders and FSA would be a bad thing.
“We need to get past this blatant name-calling by lenders against intermediaries. It’s disappointing that someone who leads their trade body is still stuck in the feedback loop that is blame the int. We need maturing in addressing this market; I am really worried about this.”