With many intermediaries saying they are handing clients KFIs that are as long as 14 pages - and concerns that lenders’ legal departments are putting information on the illustrations which is not required by the FSA – Mortgage Introducer will be relaying your comments to the FSA, to show that a review is urgently needed.
Here are just some of the industry’s comments about the current state of KFIs and its support of our much-needed campaign.
Chris Cummings, director, Association of Mortgage Intermediaries (AMI)
“We share common ground on this and would wholly support this step taken by Mortgage Introducer.”
Mike Fitzgerald, sales director, Brentchase Financial Services Ltd
“This is a great campaign of huge importance. As they stand, KFIs are too long. One from the Halifax came out at 11 pages in length. This is not what the FSA intended.
“Anything over four pages and the consumer is less likely to read it. If one lender can produce a KFI of four pages then all lenders can.”
Rob Clifford, managing director, mortgageforce
“This is a really good initiative. A KFI of two to three pages is sufficient but lenders are nervous about covering themselves.
“I don’t think clients will make different buying decisions because of the length of KFIs but it does create overload for the consumer and should be looked at now.”
Ray Boulger, senior technical manager, Charcol
“We would support this campaign as there is clearly a lot of concerns about this issue.
“KFIs are not achieving what the FSA had intended. Once the KFIs get into double figures in terms of pages, then they are clearly too long.”
Melanie Bien, head of media relations, Savills Private Finance
“While the FSA envisaged that KFIs would be five or six pages long, in reality some of the longer ones are coming out at 12 or 13 pages.
“We agree they are too long but it’s down to the fact that most people are more concerned about covering themselves than length.”
Steve Atkins, head, Mortgage Alliance
“Lenders have to realise that KFIs are designed for customers not just the industry and we should support any attempt to make sure customers are clear on what they are getting and how much it is costing them.”
John Mawdsley, director, The Mortgage Partnership
“We would absolutely support this campaign. What justification lenders have for producing 12 to 13-page KFIs is beyond me.
“Lenders have decided to put so much more information in the KFIs than is required.”
Bill Dudgeon, managing director, The Mortgage Business (TMB)
“The whole point of the KFI is to make it easy for consumers to compare products quickly.
“If certain information is on page 5 of one document, it should be on the same page on a KFI from another lender. In this sense, standardised KFIs are a good idea.”
Richard Griffiths, managing director, Network Data Ltd
“The FSA has said KFIs should not be complicated or loaded with surplus information.
“Some of those being produced at the moment are just ridiculous - lenders are not sticking to the prescribed formula from the FSA.”
Julie Hamilton, operations director, PMP
“I have recently seen them at two extremes. Firstly there was one which was just two pages but then I heard of one that came in at 19 pages.
“I would use the shorter one every time. Lenders need a clear lead on this from the FSA.”
Bill Warren, director, The Complete Network
“I believe that consumers are actually finding KFIs quite useful. As far as I know there has been no consumer research regarding KFIs, though I think they should all be easily comparable.”
John Rice, managing director, Regulatory Alliance of Mortgage Packagers (RAMP)
“I think some KFIs are too long and therefore not transparent or easily comparable.”
Rachel Bancroft, managing director, KGB Packaging
“I think the KFIs we have been producing have been pretty simple, although I do think it would be useful if they were all uniform. At the moment people just can’t compare.”
Vanessa Blount, general manager, m2-d&p (Mortgage 2000 soft packaging)
“This is a fantastic idea. If lenders used common sense in conjunction with MCOB we would not have the mess that we find ourselves in now.
“All we need is some brave lenders to stick their necks out, instead of trying to cover every possible senario in a KFI.”
Tony Jones, managing director, Pink Home Loans
“When these documents are too long it is as bad as having too little information.
“It is supposed to be about key information, so having a 13-page document would seem to be a paradox.”
James Cotton, mortgage specialist, London & Country
“In one Halifax KFI its description of a tracker rate is rather cumbersome at almost a page long.
“It seems to have been written by a legal team trying to cover every possible eventuality and while technically correct I would hardly describe it as ‘clear, fair and not misleading’ which is the FSA requirement.
“In contrast, most other lenders are able to describe a similar deal in five or six lines. This is area which can be simplified and standardised.”
