Moneynet has stopped dealing with six mortgage broker firms because it fears that they will not be able to continue trading once regulation starts.
The firm, which provides information on financial products and introduces business to 15 mortgage firms, is concerned that if brokers are not regulated by the October 31 deadline, the business they have in the pipeline will fall by the wayside.
Moneynet says it has been told by the FSA that less than one-third of brokers are geared up to trade under the new rules so it has stopped dealing with six companies which have not yet had FSA authorisation.
Moneynet believes that even if brokers apply for auth-orisation now, it is unlikely to be in place by October 31 and it is urging consumers to check that their broker has the necessary authorisation in place.
Chief executive Richard Brown says: “This is a potential disaster waiting to happen for many purchasers and sellers. We are in the middle of what is traditionally one of the busiest times of the year for mortgage transac-tions and we learn that the majority of mortgage brokers have not yet applied for authorisation.”