The mortgage industry has issued its responses to the Treasury consultation document, Regulating Mortgages, with many backing the Council of Mortgage Lenders’ (CML) response to the paper. The CML has welcomed the proposed regulation, but wants to ensure it is cost-effective and proportionate.
In its response, Norwich & Peterborough’s general manager, Stephen Penlington, said: ‘We broadly endorse the CML’s response. It is vital all mortgage-related legislation works in harmony without so-called regulatory gaps. Lenders need a clear framework in which to conduct their business. The Financial Services Authority (FSA) must publish its final rules as early as possible to allow lenders the maximum window in which to implement the significant system and business changes this legislation represents.
‘It will be helpful to lenders if the FSA can provide certainty of detail in those areas already consulted upon that are unlikely to change, following its next detailed consultation paper.’
Charcol has said it wants to see a correlation between CP121 and the consultation paper.
Ray Boulger, senior technical manager at Charcol, said: ‘The final response on CP121 will affect the regulation of mortgages and so there is a need to tie in the timetable of regulation with polarisation. The definitions of polarisation need to be clarified, as this will impact how people describe themselves on the mortgage side.’
Jonathan Taylor, head of lending development at Abbey National, also believes clarification needs to added to the industry: ‘There is some confusion over the distinction between a tied agent and an appointed representative, and we wonder if there is a mistake in the consultation paper. We have asked for clarification on this point.’
Abbey has also asked the Treasury to ensure at least 12 months is written into the process, to allow time for systems development work to be completed ‘ another proposal issued by the CML.
However, Nick Baxter, director of Mortgage Promotions, believes many have focused on the finer details of the paper, but failed to consider the cost of regulation.
He said: ‘Everyone is looking at the details, but not considering the cost. The Treasury is anticipating a £32m re-occurring cost and a £36m one-off cost. Costs will rocket for brokers under the new regime and smaller brokers need to consider this.’