The Financial Services Consu mer Panel has blasted Gov ernment plans to regulate mortgages as “narrow and confusing” for not regulating advice.
The plans have already run into trouble with lenders' representatives who claim it could push large numbers of intermediaries and lenders out of the market. Leading IFAs believe the plans will lead to consolidation and less choice for consumers.
Panel chairwoman Barbara Saunders warns there is a great likelihood of consumers being misled by some salespeople over their status. The panel also fears the current definition of a mortgage will exclude some borrowers who would benefit from regulatory protection.
It wants the regulator to cover second charge loans secured on property and short-term mortgages of less than five years and for regulation to be extended where consumers experience problems.
Saunders says: “The Trea sury proposals will be insufficient to protect consumers. The Government made a misjudgement by choosing not to regulate mortgage advice.”