Following discussion with some of its major mortgage technology partners, 1st Software believes the implementation of the current FSA plans will create problems for mortgage sourcing companies and mortgage advisers alike, creating a real threat to the use of ecommerce technology in the mortgage market.
Nick Berry, mortgage partnership manager at 1st Software, comments:
“Mortgage brokers post October 2004 will be subject to much tighter controls under the FSA than has so far been the case. The FSA's restrictive tolerance levels relating to KFI's places the mortgage sourcing companies in an invidious position. One of the most important aspects of the advisory process is to provide clients with accurate information. The diverse methods employed by lenders in calculating costs associated with a mortgage will undoubtedly create problems for the mortgage sourcing companies. This is bound to damage the move to e-commerce if advisers must check and double check information provided by companies whose sole aim is to reduce administrative time and costs for advisers. What is required is a collaborative approach by all concerned to resolve this issue.”
Steve Tully, head of compliance at The Mortgage Operation, comments:
“The FSA’s rules present all mortgage sourcing systems and lenders with a major challenge. TMO carries out thorough checks involving the lender to verify the accuracy of data entered into our TMOS sourcing system. We are actively reviewing the process and seeking access to KFI data direct from lenders IT systems to make the process as accurate as possible.
“At the moment, lenders do not guarantee the accuracy of the data they provide us with and they will be reluctant to do so. But, with or without a guarantee, lenders and sourcing systems have to collaborate, as they cannot afford to get it wrong. A sourcing system will rapidly lose business if it gains a reputation for inaccuracy and a lender risks putting itself at a competitive disadvantage if sourcing systems cannot accurately produce KFI’s for its products”
