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Mortgage Board mauls FSA red tape plan

The FSA has been slammed by the Mortgage Code Compliance Board for issuing draft rules on mortgage regulation which could swamp borrowers with unnecessary product information.

MCCB chief executive Luke March claims FSA proposals outlined in a consultation document last week are likely to leave borrowers in the dark about the terms and conditions of their mortgage.

His comments come as he reiterated his fears that FSA rules forcing lenders to monitor the information given to borrowers could result in smaller intermediary firms being sque-ezed out of the market.

March claims the FSA is missing the point of regulating mortgages by insisting the focus of pre-sale documentation is on enabling borrowers to compare loans easily.

He says if the document for each mortgage is more than one page – industry sources claim it could be up to five pages – there is a real danger that borrowers will not read the material and will fail to understand what they are signing for.

He says he would be amazed if lenders are able to develop and implement the tech- nology required to deliver the documents to intermediaries by the time the regulations come into force next August.

March says the MCCB, which already monitors adv-ice through the mortgage code, is ideally placed to regulate brokers on behalf of mortgage providers but stresses it can only do so if asked by the Council of Mortgage Lenders.

He says: “My greatest worry is borrowers will not read the material with which they are provided. It is fundamental that consumers know what they are buying and if that is not achieved the whole purpose of regulation will be lost.”

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Guide: Johnson Fleming produces auto-enrolment checklist

For a job as big as managing the auto-enrolment changes, it’s important to know what has been completed and what still lies in front of you to give you the reassurance that everything is in hand. Getting the planning and project management right at the outset can help you see the path ahead and ensure everyone knows their roles and responsibilities. To help with this, Johnson Fleming has produced a checklist outlining every step that needs to be taken when preparing for auto-enrolment.

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