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CML plans own probe of interest-only

The Council of Mortgage Lenders is likely to conduct its own investigations into the interest-only market as it claims to have learned little from the FSA’s recent probe.

It plans to look closer at FSA consumer research published last month and conduct its own internal work before deciding whether to press ahead with a more formal probe to discover if consumers are being sold the right mortgage with the correct repayment advice.

The UK’s biggest lender HBOS is also understood to be conducting research into the sector.

The FSA found that consumer understanding of interest-only mortgages is high but 10 per cent of borrowers have no idea or only a rough idea of their repayment plan, with a further 5 per cent having only a weak plan in place.

CML head of research Bob Pannell says the FSA’s work is generalist and fails to “nail things down”.

He says: “The FSA research did not take us further forward. We want to understand a bit more whether there is a mis-match between borrowers’ experience and expectations and the products they have chosen, to ascertain whether there are any issues that lenders need to think about. We are considering doing follow-up work.”

John Charcol senior technical director Ray Boulger says: “I got a lot from the FSA report and was encouraged that 90 per cent of people had a plan in place.”


FSA fines WDM £560,000

The regulator has fined W Deb MVL, formerly William De Broe, £560,000 for breach of FSA guidelines. The FSA says failings in its systems have led to poor accounting systems and inadequate client money protection, that occured over a four and a half year period from December 1, 2001 to May 3, 2005.Effectively, WDM was […]

IFS targets university students with fantasy investment challenge

The IFS has launched a scheme for university students which gives them a fantasy £100,000 to invest in the stockmarket over a threemonth period, with the overall winner picking up £9,000.This is a more sophistic-ated version of the IFS’s student investor challenge which has around 30,000 students aged between 14 and 19 investing in the […]

FSA announces distribution review group chairs

The FSA has announced its full line up of industry figures who will lead the five committees which are part of the retail distribution review.HBOS chief executive insurance and investment division Jo Dawson will head up the sustainability of the distribution sector committee and Royal London chief executive Mike Yardley will chair the impact of […]


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