With just over a month to go until Mortgage Day - the date on which the Financial Services Authority (FSA) takes over the statutory regulation of mortgages - the Council of Mortgage Lenders is advising consumers to check that any adviser they plan to use to arrange their mortgage will be appropriately registered to introduce mortgage business in the future.
Intermediaries must either be directly authorised by the FSA, or must be an appointed representative of an authorised firm, if they wish to continue submitting mortgage business to lenders from 1 November. Applications through intermediaries registered with the Mortgage Code Compliance Board (MCCB) may continue to be made to lenders in October, even if the mortgage does not fully complete until after Mortgage Day. But any new applications received from 1 November onwards must be from FSA registered intermediaries only. Lenders are not allowed to accept business from unauthorised intermediaries under the FSA rules, and will not process these applications.
To avoid possible delays, consumers should therefore check that their intermediary is an MCCB subscriber now, and will be authorised to undertake mortgage business under the new rules, before making their application.
There will be a few intermediaries whose applications have not yet been finalised by the FSA, but who will nevertheless become authorised in time. However, if an intermediary cannot show evidence that it will be authorised (especially if it did not submit its application to the FSA before 30 April, the deadline to guarantee that their application would be dealt with before the end of October), consumers may wish to consider whether they should make an application through an intermediary which is able to give such assurance.
The CML emphasises that information from the FSA suggests that the vast majority of intermediaries do seem to be on track to be authorised in time. But there are bound to be some stragglers, and consumers therefore need to be aware of the steps they can take to protect themselves against the risk of unwelcome delays.
Michael Coogan, CML Director General, commented:
"We know that the FSA is working very hard to ensure that even late applications for authorisation are processed in time to allow an uninterrupted flow of mortgage business. But consumers should be aware of the potential for disruption if their intermediary does not become authorised in time, so that they can take steps to reduce the risk of their mortgage application being delayed."
