Regulator Publishes Latest Paper On Loans
The financial regulator the Financial Services Authority (FSA) has published its latest consultation paper on its proposed changes to the home owner loan and mortgage markets, which relates to the role played by financial intermediaries and loan brokers.
This is the latest stage of the Mortgage Market Review (MMR) which was first proposed last year in order to stop many of the problems which have arisen within the home owner loan market since the onset of the credit crunch, three and a half years ago.
The consultation paper outlines how the FSA envisage that intermediaries and loan brokers would operate under the MMR proposals and is designed to provide a much clearer picture for potential borrowers on exactly how their home owner loan will work and what the costs are likely to be, without resorting to jargon, or overloading the borrower with too much information on the loan they are taking out.
The FSA said that the new proposals will simplify the loan application process for borrowers, making the process clearer and easier to understand and encourage potential borrowers to take professional advice on a home owner loan, rather than try and sort out their own loan deal.
The proposals will also make it much clearer on how the adviser will be paid for their advice and whether they are independent or restricted on the loan products they are able to advise on, so that borrowers know exactly what they are getting and what it will cost them for their loan.
Sheila Nicoll of the FSA said “This next step of the MMR recognises the importance of the intermediary and ensuring the quality of every mortgage sale.”
“It also indicates how the intermediary and other sales staff fit into our vision of a sustainable mortgage market that works well for consumers. By clarifying the role and responsibility of mortgage sellers, we are removing the blurring that could take place between the role of the seller and lender.”
