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Mortgage advisers biggest winners from MMR

by: Robert Sinclair
  • 26/10/2012
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Mortgage advisers biggest winners from MMR
As the dust begins to settle, I have been thinking on who the final winners and losers are from the final rules in the MMR.

I regret that I fear the biggest relative losers might be consumers.

With the on-going deferral of individual authorisation, consumers will have to wait to be assured that they are dealing with responsible and qualified advisers. Whilst there is a strong attempt at transitional arrangements aimed at helping mortgage and property prisoners, these do not force lenders to lend and careful monitoring from FSA will be required to ensure that lenders use these rules as intended and that they act fairly and in the best interests of customers. Finally, it is going to be more difficult to get a loan under these new arrangements.

The next biggest losers are lenders, given the move to advised, the increased focus on evidencing income and the fact the full weight of responsibility for affordability has fallen on them. The need to act in the customer’s best interest, being careful not to step across the line into advice in an execution only transaction and the prescriptive over-arching rules surrounding fees, will make their lives much harder. This is before we get to the FSA assertion that rate switches will generally be advised.

The policy statement contains some major wins for brokers with perhaps the most significant being that FSA has enshrined mandatory mortgage advice within its rules.

We have lobbied hard from the start to ensure that advice is put at the heart of the mortgage process and acting in the customer’s best interests sits at the heart of what good brokers do today. We see little in the proposals that will cause any brokers more pain than that of today, which remains finding available funding for their customers.

AMI achieved more than 90% of its consultation response requests.

Robert Sinclair is chief executive of mortgage adviser trade body AMI

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