The Mortgage Code Compliance Board has identified key issues for the industry after the FSA takes over the regulation of mortgages.
Its final annual report published last week, the MCCB recommends that in all non-advised sales, consumers should be given a warning of the consequences of not obtaining advice.
It also stated that the title adviser should only be used when advice is provided.
The MCCB is urging lenders and intermediaries to retain the reasons-why letter as part of the mortgage sales process as it can be one of the key pieces of evidence used to determine complaints.
It is concerned that the new key facts illustration is mainly product-specific, leaving out many of the more general aspects of a mortgage required by the MCCB's rules.
It believes there may be a case for firms to provide a small leaflet which lists relevant general mortgage-related issues on top of the KFI.
The MCCB believes that FSA regulation of the mortgage and general insurance markets is an opportunity for a fundamental review of regulation, looking at questions such as the point at which the extra costs of regulation are no longer balanced by additional consumer benefit.
Chairman Colin Harris says: “Our final annual report highlights the partnership we have built with the industry and the dedication of the MCCB's staff as key factors in MCCB's achievements.
“In continuing this progress, the MCCB has identified key issues for future review to help the industry and FSA as they develop mortgage regulation over the coming years. We hope this will stimulate debate as to how best to protect consumers and further increase professionalism in the mortgage industry.”