The trade body for mutuals said it was clear that the Financial Services Authority had listened and taken a substantial amount of industry and consumer feedback into account in its amended proposals.
However the BSA remained concerned about a number of specifics, in particular the intended move to a fully-advised mortgage market and consumer reaction to the extra information that lenders would have to collect to assess affordability.
Paul Broadhead, head of mortgage policy at the BSA, said the proposals from the FSA to move to a fully-advised mortgage market flew directly in the face of government policy decisions placing consumers back in control of their own finances.
Broadhead said: “The FSA is right to ensure that vulnerable consumers always get mortgage advice.
“That said to force other financially savvy consumers with previous experience to take advice, whether they want it or not, runs the real risk of detaching the applicant from both decision and process.
“We understand that the move to a fully-advised market is designed to solve the issue of consumer confusion.
“This can happen if a lender or an intermediary is not crystal clear with a mortgage applicant about whether they are receiving advice on what's right for them or just information on the product range and features available.
“If this is true, this issue can be addressed simply, and with no risk of unintended consequence, by tightening the disclosure requirements for lenders.
“This will ensure that a consumer has a clear choice on having advice or information when they first apply.”
Broadhead added that it was a fact of life that under the proposed new regime consumers would have to get used to far more intrusive questioning from lenders and that lenders would have to get used to ask more probing questions.
He said: “Neither will be easy and it will take adjustment on both sides. Some management of consumer expectation and understanding, perhaps through the Money Advice Service would be helpful before 2013 to avoid a potential consumer backlash.”
Even with these concerns Broadhead did say that the BSA welcomed the substantial shift made by the FSA compared to the controversial set of proposals published in 2010.
Broadhead concluded: “The proposals on the table now are broadly sensible and in many areas are likely to deliver the intended outcomes.”
