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Industry facing fresh talks as FSA gets remit for mortgage advice

Mortgage lenders, intermediaries and trade bodies have welcomed the Treasury&#39s decision to make the FSA responsible for regulating mortgage advice from 2004.

The announcement means that N3 – the date when the FSA was set to regulate mortgage lending and administration but not advice – has been cancelled. N3 had originally been planned for August 2002. The regulator will now be reconsulting using some of its existing consultation work.

It says the Council for Mortgage Lenders and the Mortgage Code Compliance Board will remain in place until 2004 and play an active part in the consultation.

The MCCB claims its work in establishing the first register of mortgage intermediaries and lenders has facilitated the Treasury&#39s decision.

Charcol says the MCCB in its current form will disappear from 2004 and it will have to look at how it can differentiate itself from the regulator.

The move also means many brokers who have not obtained the qualifications and compliance standards necessary to be FSA-regulated may be pushed out of the market, according to industry commentators.

IFAs and bigger, established brokers have given the Treasury&#39s move the thumbs up as it cuts out overlap among different regulators.

But Charcol warns that brokers “who choose not to provide a level of advice commensurate with a thorough compliance process will suffer”.

MCCB chief executive Luke March says: “We knew this was on the cards but the timing was a surprise. We will keep the show on the road during the transition, working with the FSA.”

Scottish Amicable national mortgage manager John Malone says: “We now have two years of consultation, deliberation and implementation on this wide-sweeping change.”


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