This is another indication that the regulator is now looking into the issue of KFIs post-‘Mortgage Day’ and what channels brokers are using to generate KFIs.
The FSA has sent 500 broker firms a disclosure questionnaire, with a whole section dedicated to the issue of Initial Disclosure Documents (IDDs) and KFIs.
It asks the firm whether its IDDs are in-house/firm generated and, if so, to attach an example, or whether it uses the following sourcing systems - Mortgage 2000, Mortgage Brain, The Exchange and Trigold – to generate IDDs.
The same question is asked for KFIs but with the additional option of whether brokers get the illustrations from the lender’s own website.
The firm is then asked to describe the level of service provided by the sourcing systems if the firm uses them to produce disclosure documentation.
It does not ask the same question in relation to KFIs provided by lenders or those who generate in-house.
Robin Gordon-Walker, spokesman at the FSA, admitted that if the questionnaire showed a significant number of brokers were getting KFIs from sourcing systems then the regulator would be taking a keener interest in the operations of sourcing providers.
He said: “If the questionnaires came back and revealed all these brokers or the majority of them were going to the sourcing systems to generate KFIs, then naturally we would then be very interested in what the sourcing systems were doing and what operations they have in place to produce compliant KFIs.”
Mark Lofthouse, chief executive of Mortgage Brain, said: “Getting feedback from brokers is always a good thing, as long as the information given is factual.”
