Just under half of new borrowers are oblivious of the Mortgage Code and unaware of the Financial Services Authority’s (FSA) role in regulating the mortgage industry, according to research carried out by the Mortgage Code Compliance Board (MCCB).
The research revealed that 59% of people who have completed their mortgage in the last 12 months do not know about the Code, their rights under its provisions, or the role of the FSA.
The results mean the compulsory leaflet You and your mortgage ‘ which explains both the Code and the role of the FSA and is given to borrowers at the start of the sale process ‘ is not proving as successful as it should be.
Brad Baker, spokesperson for the MCCB, said there was still a long way to go to make consumers more aware of the Code.
‘The Code is now more embedded in the sales process. However, we are not happy with the figures ‘ even though customers find it easy to find out about the Code should anything go wrong. When people take out a mortgage they have information overload from solicitors and estate agents and tend not to fully read the leaflet,’ he said.
To make information about the Mortgage Code more accessible, the MCCB is changing the leaflet’s format so it is easier to read. The board is also creating a separate section for consumers on its website which will be re-launched at the end of March.
Other results from the survey were more positive. 65% of interviewees believed they got a fair deal, 61% believed affordability is considered when arranging a mortgage, 64% believed they were protected against increased interest rates and 49% of customers believed they would receive sympathetic treatment for financial difficulties, should they arise.