David Wylie, managing director of c2-Financial, expressed his disagreement to views he said are currently being expressed by some directors at packager em-, which believes lenders should be made to reveal the profits they generate from mortgage sales and securitisation.
Wylie said: “I disagree with this view for several reasons. Firstly, if it became a requirement to provide this information to the consumer, surely we would see more detail being added to the already lengthy KFI. Secondly, my objection is that the securitisation does not in any way impact the consumer’s payments for the mortgage, nor does it change the terms of the mortgage contract.
“My final reason relates to the motives behind the principle of proc fees and commission disclosure. The lender is already being perfectly transparent by illustrating interest charges, arrangement fees and ERCs along with details of incentives to the adviser, all prior to the consumer’s commitment to proceed is obtained. The consumer now knows what he will be paying to the lender but, until regulation, he had no idea what was secretly being paid to the adviser.”
He added: “Far from calling for more expense and regulation, we should be looking at how paperwork can be streamlined, cost-effective and easier for the consumer to understand. What the industry needs is less regulatory cost, not more. If that is achieved, the consumer will benefit yet again.”
Guy Garrard, director of business development at em-, said: “We’re delighted to see any response and debate that benefits the client.”
