Boulger said some lenders are not interpreting the FSA rules properly and are not aware that cases that were arranged before ‘Mortgage Day’ but do not complete until after 31 October should be treated as regulated cases.
“A minority of lenders have indicated that they are going to treat transitional cases as non-regulated,” he said. “We have pointed out that this is not our interpretation of the rules. If a mortgage offer is made after ‘Mortgage Day’ it is a regulated case. When it was arranged or signed-off is totally irrelevant.
“Therefore, some lenders are taking the view that information on the KFIs, like procuration fees, is not needed, while some are just asking the broker to write the fee on top of the form. Inevitably after ‘Mortgage Day’ we will get lenders saying that they did actually need this information, which will cause many delays.”
Boulger added that lenders should be taking into account the speed in which they operate so as to calculate when pre-31 October cases should be treated as regulated cases.
Paul Fincham, spokesman for Halifax, said: “In terms of information that’s needed for transitional cases, we are dealing with that now.
“There will be no fundamental change for us when ‘Mortgage Day’ comes because we have been phasing in all the requirements that should be in place for transitional arrangements, as should all lenders.”
