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This week in Mortgages

The big news of the week has undoubtedly been GMAC’s announcement that it is the first lender to offer point of sale offer to customers.

What most people would not have failed to realise is that their announcement came before Edeus’ launch, where it also planned to herald its arrival into the market with instant offer technology.

GMAC chairman Stephen Knight insists the timing of announcement had nothing to do with the fact Michael Bolton’s Edeus is due start trading next week although not many in the market are likely to believe him, especially given spoiler campaigns had long been predicted given the high profile nature of Edeus’ marketing and subsequent publicity.

But putting egos aside, the important point is that the mortgage market has moved a step forward, something recognised by pretty much every commentator quizzed so far.

Yes, there will be some caution and maybe not everything will go according to plan from day one, but it can’t be a bad thing for the industry if customers are able to walk into a brokers’ office or talk to them over the phone about a home loan and get their offer within a
few minutes.

It certainly will help the image of the market and means it is on a par with the likes of the credit card and personal lines insurance markets, where instant decisions are available online. Yet given the complexity of mortgages and the fact not all insurers and credit card companies have that technology for a comparatively simple product, it shows how far GMAC, and soon Edeus, has come.

Elsewhere this week, and news is rather thin on the ground other than the decision to keep the base rate at 4.75 per cent, DB Mortgages allegedly having problems retaining staff, Advantage confirming it is now a sole lender and the news that average equity release rates are now cheaper than many standard variable rate mortgages.

On equity release, it is also interesting to note that In Retirement Services is continuing its march by signing up another network to boost its proposition. Tenet will introduce business from its advisers who do not have the expertise to recommend products to their customers. This follows a tie-up between IRS and the Mint network earlier in the year.

With the FSA having said in July that dabblers should refer business on, this is another example of initiatives to ensure customers are not being advised by those who have little knowledge of the market.

Finally, it is now apparent that the CML and ABI are looking to improve the MPPI baseline – the basic cover consumer should be entitled to – in a bid to improve standards in the market.

Coming in a week when the FSA fined Regency Mortgage Corporation for poor PPI practices, it is welcome news that more improvements are being mooted even if some brokers are still suspicious that the real issues are not being addressed by this latest review.

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