AMI director Chris Cummings
“In September, the AMI challenged all lenders to publish their KFI test systems. Failing this, we said that they should have them ready by the start of October so that their customers (that is the intermediary market, in case anyone forgets), could test them out. It would seem odd, after all, that a new IT system was developed for a customer who was not allowed to test it until it went live. Finally, some lenders are now publishing their systems. Are the results what the FSA expected? I see KFIs of six and even 10 pages.
Added to the fact that most intermediaries will still write reasons why letters (and if you're not sure if you should, believe me, you should) that is an awful lot of paper to expect borrowers to plough through. We will keep our ears to the ground and let members know about the changes planned on the other side of M-Day.”
Hamptons International Mortgages managing director Kevin Duffy “The Pink/MI/M2k alliance makes real commercial sense, not least because once the 3,000 Marie Celeste practitioners who are unaccounted for find their bearings, there will be a swift flight to quality. Brokers should also be considering the merits of working more closely together because lenders have long capitalised on a divide and rule culture. I sense that in 2005 we will see the emergence of much stronger representation between certain broker groupings.”
Mortgage Intelligence managing director Sally Laker
“Some industry commentators have questioned the transparency of branded lending post-FSA regulation. But my view is that as long as it is clear who the lender is on each occasion and the intermediary is authorised, it will comply with FSA rules. Branded lending is about delivering consumer choice because it enables lenders and networks to work together to provide the products that brokers need at the time they need them based on consumer demand.”
Bankhall group sales director Shaun Godfrey
“I would urge brokers to ignore the 'exclusives' debate and to focus on what FSA regulation is really about, namely regulation. The importance of exclusives has been blown out of all proportion. What really matters is the quality of the regulatory support on offer to brokers from the networks and support services providers and that the lenders are on top of their regulatory commitments. The number of exclusives or competitiveness of the products lenders provide to networks should not play a key role in the decisionmaking process for brokers either during the build up to M-Day or should they decide to switch thereafter.
Portman Building Society associate director Paul Howard
Consistency. Isn't this one of the things regulation endeavours to bring to the market? I suspect we will see a lack of consistency in some areas of KFI content. For example, in the area of fee disclosure, some lenders will disclose packaging fees and some will not. Some lenders will disclose the amount paid to each party involved in the transaction while some will only disclose the gross fee paid to them.
Some lenders will disclose income from reciprocal business arrangements while some will decide their arrangements are non-disclosable. Neither approach is incorrect – it is up to the lender how they interpret the rules. However, it does mean that intermediaries will see differences in KFI content according to which lenders they use.
Charcol senior technical manager Ray Boulger
“Any case offered on or after October 31 will be a regulated mortgage contract, which means lenders must include details of any broker fee on the offer KFI. On a straw poll of lenders last week, most appeared to have overlooked this. Hence they will not have information from brokers about the amount of the broker fee, if any. This has serious potential for consumer detriment because the extra work will inevitably result in delays in producing offers.”
CML head of external affairs Sue Anderson
“The main big piece of news over the past week was the FSA's announcement about how it would treat firms and individuals refused authorisation but who appeal against the FSA decision. These firms will be deemed authorised from M-Day until the conclusion of their appeals tribunal process. This week sees the publication of MCCB's final annual report and gives the industry an opportunity to reflect on its successes. The CML admires the way in which MCCB has undertaken its tasks and believes that it has given the best possible starting point for the transition to the new FSA regime.”