The Mortgage Operation (TMO) has called for an industry-wide rethink on the way mortgage data is verified in light of impending regulatory changes.
The company said some confusion remains over what needs to be provided to consumers at point of sale and that accurate quotes in a set format will have a significant role.
The foreseen difficulty with lenders verifying this information means technology will undoubtedly play a large part. Most advisers are likely to use sourcing systems to access verified information when the regulations come into place, which currently vary between offering access to some or all of the available market.
But lenders have recently been taking stakes in these systems and according to TMO, there is a danger they will only provide information on the systems they are linked to.
Mark Charlesworth, managing director of TMO, said advisers could find themselves having to align with only a few lenders, or using more than one sourcing system, making it difficult to make meaningful comparisons between products.
‘My concern is that there seems to be polarisation going on here. Post N3 lenders will only deal with compliant systems, so I am raising this issue early on. It may not be an even playing field ‘ you could have one or two systems available that could not cover the whole market and be expensive for brokers to run. This is happening by default at the moment,’ he said.
As a solution, Charlesworth said some form of data warehousing could be utilised.
‘The reason lenders are giving for buying into sourcing systems is that they are ensuring they have a solution to the requirements under N3. But there are other ways of doing this. For the last four or five years there has been healthy competition to provide mortgage sourcing software, which has to be priced right, robust and cover the whole market. Post N3, nothing changes, except the information on the system must be guaranteed accurate and verified by the lender. This could easily be done by accessing the data from one or two data warehouses,’ he said.
Currently the Financial Services Authority is aiming to make mortgage comparison tables available to the consumer, which is being collated through data warehousing company The Research Department. Charlesworth said this could provide a reasonable