The mortgage industry has called for the continued maintenance and development of the Mortgage Code in the run-up to statutory regulation under the FSA.
Speaking at the Treasury Mortgage Seminar, David Seviour, franchise support director at Allied Dunbar, highlighted the risks to mortgage buyers if current regulation fell by the wayside.
He told the seminar that while statutory regulation does look inevitable, it could take three years to implement.
Seviour said: “During this time when a new regulatory framework is being created, there is a danger that those who may have subscribed to a voluntary Code – because they felt they had no choice – may feel that this is an opportunity to withdraw from the Code on the basis of ‘why should I incur costs today when I do not know what the new regime will look like in the future?'”
As a result, the industry must stand behind the Code and continue to develop it. Should this not happen, he said, recent developments in consumer protection could be lost, damaging market confidence.
The Mortgage Code Compliance Board share this fear. It said in its response to the Treasury consultation on mortgage regulation that it would continue to develop and enhance the Code.
Also speaking at the seminar, Michael Coogan, CML director general, said that while statutory regulation was an ideal opportunity to clarify regulation, in practice it could be difficult to achieve.
He said: “As each day passes, the prospect of a simple statutory regime recedes. Each intervention by different Government departments makes it increasingly difficult for a ‘joined up’ approach to regulation to be taken.”