According to the results of a survey, conducted at a CP98 briefing organised by Marlborough Stirling, while 69 per cent of lenders agree that more regulation in the UK mortgage market is a good thing, 89 per cent remain convinced that the Treasury is wrong to put the emphasis on the provision of information to consumers rather than regulating mortgage advice.
The survey of over 60 UK lending professionals also revealed that while the 31 August 2002 deadline creeps closer it seems many lenders are having to wait until legislation is finalised (expected in January 2002) before they can seriously address the issues. At present only seven per cent say that they are prepared for mortgage regulation, 89 per cent have done some preparatory work and four per cent have done nothing as yet.
With so little time left, meeting the August deadline will be extremely tough for lenders - who cite administering accurately (31 per cent), finding the resources to do it (29 per cent) and providing controlled access to IT systems (20 per cent) as the biggest headaches to solve before they can hope to comply.
Further results show that most lenders (71 per cent) feel 'aggrieved' at having to take responsibility for mortgage intermediary compliance. And, when it comes to ensuring that intermediaries do comply, most (71 per cent) say they will employ a mixture of monitoring (via a mystery shopper) and conducting audit trails. 23 per cent say they will conduct audits only and 10 per cent say they will just use the monitoring option.
According to the survey, while lenders are sceptical about regulation, 63 per cent feel that it can be successful in achieving its goals. And encouragingly the FSA was given the vote of 51 per cent as the organisation best positioned to regulate the industry. It was followed by CML (25 per cent), and MCCB (20 per cent).
Finally, 47 per cent say that mortgage regulation is the biggest challenge facing lenders in the next five years. This was followed by 'reducing costs' (26 per cent), 'improving customer service' (10 per cent) and 'launching products quickly' (seven per cent). Utilising the internet trailed in last place with only three per cent of the vote.
Kate Main, senior policy adviser at the CML, said: "We will not know until the end of the year how many of the industry's comments have been taken on board and reflected in the final FSA rules. That leaves lenders with less than eight months to commission, design, test and roll out some very sophisticated IT systems to support their new responsibilities - and at the same time they will need to make much of the technology available to mortgage intermediaries as well. This is a huge IT task. It is important that it does not fall at the first hurdle, which is why we and many lenders are urging the FSA to postpone the implementation date for the rules until the IT solutions are much further developed."
