A high level meeting between the regulator and representatives of several regulated bridging firms took place in Canary Wharf at the beginning of the year.
Under section 348 of the Financial Services and Markets Act 2000 the FSA is not obliged to disclose the names of those firms that were represented at the February 10th meeting. However it is thought to have been attended by some of the more prominent names in the bridging industry and possibly the Association of Short Term Lenders.
A spokesman for the FSA said: “There was a meeting on 10 February with several bridging firms where retained interest was discussed.”
Mortgage Introducer revealed yesterday that bridging lenders face paying customers hundreds of thousands of pounds in redress after the FSA said retained interest calculations failed to comply with MCOB regulation.
Most bridging lenders have so far declined to comment on the FSA letter.
But one source said: “The fact that the issue was discussed as far back as February with the regulator means the FSA’s letter could hardly have come as a shock.”
Despite the lack of comment from the bridging lending community some brokers welcomed the FSA’s decision.
Arron Bardoe, director of Temple Capital Finance, said prohibiting retained interest was a good decision for the FSA, especially for regulated loans and for occasional users of bridging.
He said: “It will make cost comparisons far easier for borrowers and lenders will merely reduce their maximum loan or adjust their interest rates to counter any increased risk or loss of income."
Arron Bardoe was awarded as the Best Mortgage Brokers in the UK. Read the full winners here.
