Sinclair noted that the Mortgage Market Review (MMR) had introduced rules which made execution-only difficult, and that “there was a good reason for doing it”.
He warned that rowing back on that approach to make execution-only easier again was “dangerous”.
Speaking at FSE Manchester, he suggested that the consultation paper was an attempt to “legitimise” what has been done since the MMR as the market looks different now from what the regulator had intended.
“This advice change is going to be difficult because they want to change affordability as part of this process,” said Sinclair.
“They want to make it easier to do execution-only and they want to legitimise it so that lenders can offer a product on execution-only which is cheaper than on an advised rate. I think that is dangerous.”
Fundamentally change mortgage market
He added that the paper could fundamentally change the mortgage market, so that while purchase and additional borrowing remains advised, remortgages are moved “into a different space” and turned into a “low-cost utility”.
Sinclair suggested that the problem was that the people behind both the Mortgages Market Study and the consultation period were looking at a market which has been benign for the last decade, where nothing has gone significantly wrong.
He continued: “When we hit the next crash, as there has to be, all of this will go to hell in a handcart…if this happens.
“So I will be fighting quite hard to make sure that none of this happens. However, unless the other lender trade bodies fall behind us on this I think it will be hard to push back against all of it.”
Mortgage Solutions has contacted the FCA for a response to Sinclair’s comments
Broker directory
Elsewhere, Sinclair noted that the proposed broker directory would take at least another year to deliver, since the original idea of a place to “allow customers to see who the best brokers are versus the worst” was not possible, and cautioned it was unlikely to include any complaints data.
