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Mortgage affordability move could risk broker relations

Experts have warned that if the FSA’s forthcoming discussion paper on mortgages passes sole responsibility for assessing affordability to the lender, many may review whether they still need brokers.

As revealed in Money Marketing earlier this month, the regulator’s review of mortgage conduct of business rules looks likely to put the onus of affordability on the lender, whereas currently the intermediary and lender share this duty.

Stroud & Swindon sales and marketing director Linda Will says: “If all the risk went to the lender, brokers would not serve any purpose. They would not need to take responsibility for what they said and did, so why would the lender need them?”

Bill Warren Compliance managing director Bill Warren agrees that such a ruling would harm the relationship between the lender and broker. He says: “If the lender has to take the whole responsibility, they may not want to be involved as much with the intermediary community as they have been.”

But while the Association of Mortgage Intermediaries has called for the responsibility to fall on lenders, director Robert Sinclair insists brokers will continue to play a major role in the mortgage market.

He says: “Brokers are there to give advice and that will continue to be the case. Lenders will still want borrower information packaged up so underwriters can look at it in a structured way.

“Lenders do not have the resources to do that themselves.”


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