From 1 November, the day after the FSA regime comes into force, any mortgage application - other than one made directly to a lender - must come from an intermediary who is either directly authorised by the FSA or an appointed representative of an authorised firm. In order to process applications without delay for borrowers, lenders will need to rely heavily on the information on authorised intermediaries contained in the FSA's Register.
Although a number of lenders may be able to carry out further checks to verify whether an intermediary who does not appear on the Register is, in fact, authorised, that could delay a borrower's mortgage application. In practice, many lenders may only be able to rely on the veracity of the Register, so intermediaries who are not included may find it difficult to get an application accepted.
A month ago, the CML urged borrowers that in future they would need to check that any intermediary through which they were planning to submit an application was appropriately registered. If an intermediary cannot show evidence of being authorised, it is possible that the application will be rejected by the lender. In those circumstances, the customer may experience delay while they re-submit their application, either directly to a lender or through an authorised intermediary.
The CML's deputy director Peter Williams said: "We recognise the huge scale of the task undertaken by the FSA. However, lenders now need to move into the new regime without causing disruption to customers or to the market. To do this, they must have a reliable and readily accessible means of checking whether an intermediary is properly authorised. The FSA Register is the only practical way to do this, and lenders will be relying on it as the authoritative source.
"Lenders do not want to reject or delay a customer's application but they cannot ignore that, from Monday, it will be a statutory requirement that they only do business with an authorised intermediary. If there are not straightforward and reliable ways of checking this, there could be some disruption, but lenders will make every effort to minimise this."
