The Financial Services Authority has today outlined proposals in its third and final Mortgage Market Review consultation paper CP 10/28 on distribution and disclosure.
The regulation also requires that those selling mortgages ensure that each one sold is ‘appropriate’ for the customer’s needs and circumstances, therefore clarifying the role of the mortgage seller (both intermediary and branch based).
As hinted at by Sheila Nicoll, FSA director of conduct policy, at last week’s Mortgage Business Expo, other changes include replacing the obligation to issue an Initial Disclosure Document to the customer with requirements to clearly and prominently disclose key information about how the intermediary will be paid and the service they offer.
The FSA is proposing to change the trigger points for providing the Key Facts Illustration to minimise information overload on consumers and reduce burdens on firms and will introduce a requirement for all individuals who sell mortgages to hold a relevant mortgage qualification ensuring appropriate professional standards across all sales.
The paper also proposes to replace the existing labels used to describe the firm’s service with the Retail Distribution Review’s ‘independent’ and ‘restricted’ labels.
Nicoll said: “This next step of the Mortgage Market Review recognises the importance of the intermediary and ensuring the quality of every mortgage sale. It also indicates how the intermediary and other sales staff fit into our vision of a sustainable mortgage market that works well for consumers.
“By clarifying the role and responsibility of mortgage sellers, we are removing the blurring that could take place between the role of seller and lender.”
