The broker support site revealed that brokers wanted both intermediaries and lenders to be responsible for assessing income with some brokers even asking for three-fold responsibility.
A typical response cited by tcfinfo where brokers wanted more responsibility over affordability rules said: “All parties, including the client, need to feel comfortable that the loan is affordable. If we pass this liability on to either the lender or the intermediary (or both) then it's carte blanche for the client, who may have financial difficulty later due to some other reason, to blame the broker/lender. People need to be allowed to take personal responsibility.”
The latest consultation paper for the FSA’s Mortgage Market Review proposed that responsibility for a borrower’s ability to repay a mortgage would lie solely with the lender.
Following a campaign to encourage mortgage brokers to “Join the debate” tcfinfo delivered the collective results of 2697 questionnaires to the FSA on their latest Mortgage Market Review proposals in CP11/31.
The move was prompted after research taken by the website last year, showed that 92.47% of brokers had not responded to the FSA or a trade body and 60.27% had no plans to do so
Some 86% of brokers agreed with the FSA’s proposal that vulnerable consumers should always be advised and therefore would not be able to purchase their mortgage through a non-interactive process.
However broker comments showed there was concern about the parameters the FSA may use to define ‘vulnerable’.
One example said: “I agree that vulnerable people should not be able to buy without receiving advice. However who defines what is a vulnerable customer - in the real world it is not black and white. Without understanding a customer's needs, circumstances, budget and preferences (knowing your customer) it is impossible to decide if they are 'vulnerable'.”
A majority of 97.2% of brokers were in favour of the FSA’s proposal to require intermediaries who only offer bridging loans to describe the restriction on their service to the consumer and 71.6% agreed that the FSA should define a bridging loan as a regulated mortgage contract with a term of 12 months or less.
Unsurprisingly, 67.9% were against the FSA’s proposal to apply a consistent approach to regulating interest-only across the board but were instead in favour of a more flexible approach to the different consumer types.
Commenting on the results, a spokesperson for the FSA said: “We welcome the fact that mortgage intermediaries have provided valuable feedback to our MMR proposals as we have progressed through the various stages of consultation.
“It is important that firms make their views known and we do take their comments into account when considering any amendments.
“The high response rate indicates that firms have found the tcfinfo MMR survey a convenient channel to direct their views and we are encouraged by their level of involvement.”
Frank Eve, managing director of Frank Eve Consulting which runs tcfinfo, said “Over the last two years we have extended the offering of tcfInfo to offer concise updates on changing regulation and developed a healthy interaction with our 6000 database of registered users to gain their feedback on the market.
“These results show that individual brokers are interested in future regulation; they just needed an easy-to-use channel to express their views and tcfinfo has provided this.”
Robert Sinclair, director of AMI, said: “This is very useful measure of the opinions of a wide audience who will be impacted by MMR. The feelings expressed here mirror what AMI has been finding, with strong support for the advice recommendations made by FSA.
“Similarly the need for some consumer responsibility has been expressed both in recent European proposals and from some of the consumer representatives. These survey results give more colour and support to the response given by AMI to the consultation.”
