Chris Cummings, director,Association of Mortgage Intermediaries The FSA has a wonderful phrase – policing the perimeter – to describe the activities of catching the bad guys.
Many firms which fell at the regulation fence will accept their lot and become introducers until approval comes through or go into the truly unregulated markets but others may be tempted to buck the system and carry on in the mortgage market.
The FSA has said it is a priority to catch miscreants, which is an attitude I think we all should support.
I am confident that the FSA is serious about its intent to catch those who are trying to subvert the system. That is good news for intermediaries in in two ways. First, it means there will be more business to go round and, with a market showing signs of cooling down, that is no bad thing and it will help recapture some of the money spent on regulatory preparations.
However, it is the second reason I am even keener on. Any industry's biggest asset is its reputation. Regulation has come at a high cost but it can only be a price worth paying if it protects and helps us build our reputation as mortgage intermediaries. Any rogue elements operating in an industry undermine consumer trust and, in the long run, that comes at a far bigger cost to everyone.
The FSA is said to be recruiting more supervision staff who will be on the road. It is understood they will be mystery-shopping to get an insight into how mortgage regulation is taking effect, how KFIs are being produced and how intermediaries step up to the regulation plate.
Treat these first few weeks of the new regime with particular care. There may be some intermediaries who have not got organised and you need to be careful about doing favours for friends in these transitional days. If anyone approaches you looking for a favour, to process a case on your FSA number, you should decline the request immediately. If you want to go ahead, treat it as an introduction and take up the process from scratch.
With the FSA being so active in the marketplace, a good watchword for the moment is “caution”. It takes time to adjust to a new way of doing things. Make sure you know what your new habits should be and even if your client is in a hurry, protect them and yourself by doing things properly – and that means by the FSA book.
Sally Laker,managing director,Mortgage Intelligence
There seems to be an unhealthy focus within the industry on judging a network by how many members it has signed up. It is not a numbers game. I would urge brokers to focus on the quality of the package on offer from a network in terms of regulatory, IT and marketing support coupled with access to market-leading products and exclusives as big numbers can easily be achieved through under-pricing.
Although we have recently announced that we will have over 2,400 members by M-Day, well in excess of targets, the quality of our proposition for brokers is what should really count and is how we would want to be judged.”
sales director, Bankhall Group
I am concerned at the number of networks who seem to be turning to third-party compliance providers. Some business functions suit outsourcing, but not compliance.
Compliance support is at the heart of any serious proposition from a network or support services provider and outsourcing this function smacks of desperation. The directors of these organisations are personally liable for the compliance service they provide so outsourcing it is a potentially dangerous game based on margins but what about quality and standards of service?” Bernard Clarke,communications manager,Council of Mortgage Lenders Mortgage Day is almost here but we will not be able to judge its effects on the market for a while yet. What lenders really need now is a period of consolidation to let the rules bed in.
The FSA can help by striking the right balance between allowing some flexibility and being as clear as possible about exactly how the rules will work in practice.
Regulation is all about consumer confidence, which is why we have introduced our three initiatives to help make sure the rules on lifetime mortgages work as well as possible.