Commenting on the move to make all mortgage advisers, including branch-based staff, and those who arrange non-advised sales, personally accountable through the approved persons proposals, Robert Sinclair, director of AMI, said:
"AMI has consistently supported a register for all those working in the mortgage sector. This is a significant step forward in protecting the public and increasing access to advice. It is right that the approved persons regime will be applied to all those involved in selling mortgages, advised and non advised both within lenders and through intermediaries.
“If branch based staff are advising on mortgage products they should hold the same level of qualification and status as mortgage intermediaries. This will provide a consistency that will continue to enhance consumer trust in our industry.
"We do have some concerns about the depth and scale of the CF31 proposal, which is a fully blown authorised person function. We are yet to be convinced that this is an appropriate level of authorisation for the mortgage profession and will continue to monitor matters with FSA.
"Further detail is required on arrangements for remortgaging. Consumers deserve the same level of protection when re-mortgaging as when taking out the initial mortgage, particularly when fees can be very high for this process. We hope FSA will demand the same standards for both transactions.
"We support the decision by FSA to push back on the timetable to ensure the regulator has its automated systems available. And welcome guidance about the need for full disclosure.
“Prior issues might not preclude an adviser from being approved, but hiding issues will call into question the integrity of an individual."
Council of Mortgage Lenders
The Council of Mortgage Lenders has responded to the FSA's policy announcements today on "arrears and approved persons" and "sale and rent back" with a mixed view.
On arrears, most of the FSA's proposals already reflect lender practice. The CML is pleased that smaller firms with low levels of arrears cases will be able to apply for a waiver from the more draconian call-recording requirements that would otherwise impose disproportionate costs and beureaucracy on some lenders.
Uncertainty still remains about how third parties will manage their new obligations when dealing with telephone recordings of arrears discussions.
On approved persons requirements, while the CML considers this imposes an unnecessary additional cost on lenders, it believes that it does at least bring clarity to the scope of which staff are included, and successfully avoids the potential unintended side-effects of capturing administrative staff, and arrears staff putting forbearance measures in place, which was one concern about the original proposal.
On sale and rent back, the CML welcomes the additional protection that the new regime will put in place for consumers, and especially the clampdown on emotive advertising.
The five-year-minimum security of tenure will help to prevent short-term exploitative acquisitions by unscrupulous companies, and the 14-day cooling-off period is also a helpful intervention in this particular part of the market, where consumers may be vulnerable and at risk of making poor upfront decisions.
CML director general Michael Coogan said: "In financial regulation, as in football, whether we like it or not the referee's decision is final. In this case, while we may feel somewhat harshly treated in relation to the treatment of lenders under the approved persons regime, we do recognise that the FSA is trying to make sure there is a clean game.
"We will now be working closely with the FSA on the next stage of its mortgage market review, and the crucial issues of what sort of mortgage products and what sort of verification processes it will expect in the future.
“These aspects have the potential for major impacts on consumers and the market - either positive or negative.
“It is vital that the industry and the regulator work closely together to achieve the right outcomes, introduced at the right time taking account of the state of the market, if we are to put in place a sustainable mortgage regime for consumers, lenders, intermediaries and regulators alike."
