An industry compliance veteran has given his qualified support to the FSA’s final rules for the Mortgage Market Review (MMR).
Bill Warren, managing director of Warren Compliance, believes he regulator has adopted a common-sense approach to its new legislation.
He said: “Importantly, the new rules represent good news for the intermediary in the main. The ruling that face-to-face and telephone sales must be advised removes consumer confusion and strengthens the significance of what mortgage brokers do. The requirement that all sellers must have relevant mortgage qualification also levels the playing field and comes eight years after this became mandatory for brokers after M-Day. The consumer can only gain from this enhancement of professionalism.
“In terms of interest-only mortgages I think common sense has now prevailed and there is now no reason for lenders to treat it as high-risk. The recent overreactions of lenders in withdrawing from this market have been anti-consumer and out of touch with what borrowers want and need. Placing more responsibility on lenders to account for affordability is another sage move, although intermediaries must be clear about each lender’s approach and the third party distribution channel as a whole must ensure lenders don’t use this as an excuse to ease them out. Income and expenditure recording within the sales process will also be critical – as will individual lenders’ interpretations – and the FSA has sensibly positioned the responsibility with the lender to ensure that both employed and self-employed customers are treated fairly.”
Warren added: “Finally, the implementation timescale of the Mortgage Market Review has just been too long and the impetus for improvement has been diminished as a result of this. I understand the practical IT and qualification issues that have caused the date to be pushed back to 2014, but it has still dragged on beyond an acceptable timeframe.”
