Each week, we pick the best letters to the editor and online comments to the hottest stories to give you a flavour of what the industry is really thinking.

You can take another look at the week’s news and peruse our round up of most thought-provoking or unmissable comments.

Comment on any Mortgage Solutions story, include your name and your company and next week you could feature in Mortgage Mutterings.

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Firms waiting 21 weeks for FSA authorisation 11 October 2010

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So not only do the FSA offer advice that can potentially screw the whole world of independent financial advice but they cant even deliver a “good” service level to new company registrations… of course it must be down to bad form filling on the part of the advisor.
what a joke!!

Michael Rogerson

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Hot Topic of the week – MMR: Are the trade bodies doing more harm than good? 11 October 2010

Better to have a dialogue?
Being a supporter of AMI since its inception, I have seen much of the work that is done in the background before anything comes out in print. Lobbying is all about influencing views and although you would love to win every point, unfortunately you have to understand you can’t. You only have a voice if someone is willing to have a dialogue and these types of comment never seem to understand that without this dialogue, what seems bad now, at some point could have looked a lot worse. Instead of complaining about what you think they do or don’t do, why not get involved…many practitioners give their time for free to try to help shape the industry for the future…why don’t you (and that’s all of you reading this!) get involved?
Steve Smith

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FSA bans and fines 3 mortgage brokers over £400k 12 October 2010

All these guys will do is find another way to place their business. This could be through another broker who offers to pay them half the fees/comms. Well done to the FSA for earning some more money towards your Christmas party. Shame the money doesn’t go to the FOS to pay towards client complaints which in turn would reduce the overall fees that advisers have to pay yearly to the FOS. But hell, who said it was a fair world!!

anonymous

Comment two

Income Verification
The present property prices will always make it necessary for people to inflate their income. So long as a greater percentage of people do not have income of £40k and above, the UK housing market will never pick up because of the present income verification method. Shah would have been able to be paying his monthly mortage, regardless of whether he inflated his income or not. A lot of people got their mortages through this method and today they are still in their homes and paying their mortgages without any qualms. Only a very few people abused the system, as usual. If the FSA do not want people to inflate their incomes, they must come up with a better system which will ensure that people who can pay their mortgage and earn less than £40k are able to step on the property ladder. If the FSA continues like this the UK property market will continue to be in a sorry state. There has to be a way people with less annual income such as Shah should be able to own a property.
Jody

Comment three

Did I hear this right??
Jody – I sincerely hope you are not a mortgage broker. “The present property prices will always make it necessary for people to inflate their incomes” – er no, this is law-breaking. You might have well as said “The high price of X-boxes will always make it necessary to steal one if you can’t afford it”. What makes you think Shah ‘would have been able to be paying his monthly mortgage’ if he needed income of 6 times his actual declared income to get it? And what alternative verification method for this income proof would you prefer? “Yes, I am earning this, honest Guv”?

The assertion that ‘only a very few people abused this system’ doesn’t make it right! The FSA do not dictate what constitutes ‘affordable’, they only prescribe that brokers and lenders can prove it using ‘reasonable’ measures. Being able to prove it with falsified references does not make anything affordable. The FSA also cannot make something affordable for people with too little income. Why would they? You cannot give people a bigger mortgage than they can manage just so they can buy a house. I aspire to own a top of the range BMW but cannot afford it – however I may now ask the FSA to step in and bring the high prices down. Or, using your advice, I will tell the BMW finance people I earn 4 times what I actually do and then I must be able to afford one, right?

Once again, I would be interested to know if you are a mortgage broker in the UK. And no doubt so would the FSA. Please provide your full name and who you work for to be entered into the FSA’s long running competition “Who Wants To Be A Banned Mortgage Broker?”
Andy
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Feature: Equity release – pension solution and future business stream? 12 October 2010

Equity release – pension alternative & immediate business stream

Vanessa is, of course, absolutely spot on, but I would go further in suggesting that the family home must be considered in every case by IFAs planning their clients’ affairs. The staggering number of people subscribing to the ‘my home is my pension’ mantra without having a clear plan as to exactly how and when they will take that income means that advice is critical.

The days of passing on the family home to kith and kin on death are over for the vast majority. It is time to throw the home in the retirement mix along with every other asset. We know that our clients are likely to live for a very long time in retirement on a much smaller pension, with the greater prospect of ill health and limited means to provide for their care. The home is an asset so spend it when you need the money.

Simples, as they say.

Simon Chalk
Later Living
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Remortgaging set to soar 13 October 2010

Interesting thought and I will read the report with interest but I would be surprised if remortgaging took off as suggested. Looking at products on maturing rate incentives the question is what alternatives will the customers have availaible to them?

With house prices declining over the last 3 years LTVs are under pressure, there are very few lenders now active in the market, criteria is much tighter and pricing generally higher by a long way. Not to mention the Government spending cuts and slowing economy, effects on unempolyment etc etc.

Taking all of this into account, I think remortgaging will remain subdued for some time to come until we see a return of liquidity to the markets, notwithstanding possible interest rate hikes.

Tony Ward

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Have a great weekend.

The Mortgage Solutions team