Sourcing system Mortgage Brain wants those providing quotes from across the mortgage market to be given leeway in the accuracy of those quotes, compared to those available direct from a lender.
Mark Lofthouse, chief executive of Mortgage Brain, said: ‘We met with the Financial Services Authority (FSA) and discussed the issue of tolerances for companies that quote across the market because of inconsistent calculations that lenders utilise. Consequently a reasonable level of tolerance must be allowed for sourcing companies.’
Explaining the problem he said: ‘To highlight [the possible inconsistencies] the example I use is what is a month? Is it 28 days or 31 days? There is a spread in the number of days of about 10% ‘ I am not asking for that tolerance, I am just trying to work out what tolerances are reasonable.’
A spokeswoman for the FSA said it was something being looked into and that guidelines would be brought out in due course, although she could give no timescale.
Sean Hornsby, sales and marketing director at Mortgage 2000, agreed the issue could become serious. He said: ‘The FSA needs to give guidance on whether the quote has to be a penny for penny quote as provided by the lender.’ He continued: ‘The FSA seems to have disregarded sourcing systems from the equation, although not intentionally.’
Hornsby said possible solutions may be to get the lenders to provide quotes through the sourcing systems, but said the practicalities would be difficult to work out, with over 100 lenders involved, not to mention the number of distributors they would have to collaborate with.
He added that another area of concern was the calculation of annual percentage rates, which was not done by a standardised method, and was hoping guidance would be forthcoming.