Changes outlined in the Mortgage Market Review mean these exceptions will allow a small number of borrowers to submit mortgages on an execution-only basis. It said that the channel had been expanded to include business borrowers after feedback on its original proposals.
The FSA said it was limiting the channel to specific borrowers in these three areas to prevent any abuses of the system.
It said: “While monitoring and supervising the levels of execution-only business may highlight concerns to us, it is a reactive tool and would not prevent consumer detriment occurring.”
Respondents to the original proposal suggested that the definition of a ‘mortgage professional’ was too broad, but the FSA said the definitions were clear and would exclude non-professionals in the sector, such as administrative staff.
The FSA said that High Net Worth customers must confirm in writing that they fully understand the consequences before proceeding with an interactive execution-only sale and that that firms will be required to give advice to all other customers when purchasing a mortgage through an interactive sales channel.
Execution-only will also be allowed for non-interactive sales, such as online and postal.
Self-certifications of income completed by the customer are not allowed, the evidence must come from a source independent of the customer.
