In FA, brokers were advised to focus more on compliance in order to offset the risk of a mis-selling scandal. Eversheds, one of the largest law firms in the UK, suggested that the Financial Services Authority (FSA) could take more enforcement action against the mortgage industry unless brokers paid more attention to compliance.
The warnings came after the regulator found that only one third of companies giving mortgage advice had robust processes in place to provide customers with suitable advice. The financial services litigation expert for Eversheds, said: “Care needs to be taken at every stage of the advice process to ensure that good practice is followed and can be demonstrated. When assessing a client’s ability to afford a mortgage product it is important to have thorough processes in place to ensure that suitable advice is given.”
In the Mortgage Extra supplement of FA, Jonathan Cornell of Hamptons makes predictions for 2007. He says a fine time is ahead for non-conforming, and predicts that lenders will expand their ranges, with more interest in the prime specialist areas from those who have traditionally concentrated on non-conforming.
MI examines the network sector and asks whether consolidation is on the cards. Despite the predictions by many in the industry, networks continue to maintain their independence, but John Smith of GHL Group believes that cheque book power could hold sway in 2007.
Griffiths says:
I have long been an advocate of network consolidation. Many networks have sub-critical mass in terms of financial sustainability. Last year saw a number of network closures with consequent financial hardships imposed on their members. The sooner the smaller networks merge or sell out to the larger players the better.”
MI also contains yet another article on Home Information Packs (HIPs) by Stephen Smith of Legal & General, who says brokers are in a strong position to educate the public about HIPs, while Richard Beardshaw in a separate article explains the role of the business development manager. Beardshaw says the complexity of the market means any help given to aid the broker in simplifying processes will prove extremely welcome.
MS reports on the Mortgage Packager Summit, with the news that the Association of Mortgage Intermediaries is to set up a standing committee to represent packagers in a bid to unify the industry.
Griffiths says:
“Despite the implication that the packager industry needs unifying, the tone of the Summit was positive and upbeat. I attended, and was surprised by the focus on technology during the sessions.”
MSL reports that the Paymentshield row with brokers over the non-payment of renewal commissions could end up in court.
Publications mentioned
Financial Adviser FA 25 Jan
Mortgage Introducer MI 27 Jan
Mortgage Strategy MS 29 Jan
Mortgage Solutions MSL 29 Jan
