The Council of Mortgage Lenders wants the FSA to ensure advisers provide
full information on all aspects of mort-gage products and not just compare
them with Cat-standard mortgages.
CML director general Michael Coogan says the FSA will have to decide on
its preferred option for mortgage advice in the coming months as it is
given the authority to regulate mortgage products.
He believes the FSA has a choice of compelling advisers to simply compare
non-Cat-standard mortgages with Cat-marked products or to reveal all the
features of a mortgage, of which the benchmark would be only one.
The CML is urging the FSA to put Catmarks into context and deal with the
benchmark as one of many product features.
Coogan says: “The issue is consumer knowledge. The full picture of
financial implications must be made available to the customer. Just saying
whether a product is Cat-friendly or not does not fulfil this
Mortgage brokers may have to consult lawyers to reword their terms of
business following the Government's decision to ban char ging fees for
advice on Cat-standard mortgages.
Under the conditions of the Consumer Credit Act 1974, the maximum amount
that mortgage intermediaries can charge clients if a mortgage is not
completed within six months is £5.
But under the Catmark regime, many brokers will be obliged to rework their
terms of business.
Scottish Amicable natio nal mortgage manager John Malone says: “Advisers
are going to have to make sure that their terms of business include the
fact that no charges will be made on Catmarked mortgages.”