Speculation is mounting that the Mortgage Code Compliance Board (MCCB) will become involved in the relationship between lenders and brokers in the face of pending regulation by the Financial Services Authority (FSA), scheduled for introduction in August next year, writes Paul Robertson.
CP98, the consultation paper proposing the new mortgage regulations, focuses heavily on the regulation of information given by lenders through brokers and other channels, throughout the lifecycle of the mortgage.
Apart from obvious cost and logistical problems, this raises problems for the lender/broker relationship. With growing competition, lenders are wary of being too intrusive or slowing the mortgage process. In addition, advisers regularly deal with more than one lender, making third-party intervention seem like a reasonable solution. But as yet there has been no formal proposal.
Rob Clifford, chief executive of mortgageforce and a director of the MCCB, refused to comment in his capacity as an MCCB director, but said: ‘As an adviser, I am horrified at the prospect of 21 lenders rifling through my filing cabinets checking I am compliant. Under the current FSA proposals, lenders will have that responsibility. If it is felt that lenders will effectively outsource that work to a body, I think it is a good idea. As the MCCB is already involved in policing brokers, it could possibly fulfil this job for lenders too.’