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FCA looking at broker panel to work with mortgage prisoners

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  • 04/02/2020
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FCA looking at broker panel to work with mortgage prisoners
The Financial Conduct Authority (FCA) is working with broker representatives to potentially create a list of advisers willing to work with mortgage prisoners.

 

Mortgage Solutions understands the regulator is considering the best way in which to make an intermediary list available to borrowers trapped with inactive, unregulated or closed lenders.

Last week in a response to economic secretary to the Treasury John Glen, UK Finance revealed it had asked the FCA to co-ordinate a group of brokers to work specifically with mortgage prisoners.

A day later the mortgage prisoners group delivered a letter to Number 10 to get more help after what they called a “frustrating” meeting with Glen.

It is understood the FCA has discussed UK Finance’s idea of a register of brokers and will continue to do so as part of the industry implementation group.

The implementation group consists of trade bodies including UK Finance, lenders and administrators, to help improve borrower journeys and bring products to market.

 

AMI ready to support

Association of Mortgage Intermediaries (AMI) chief executive Robert Sinclair told Mortgage Solutions that the body had been in conversations with the regulator, supported the move and was looking to help in any way it could.

Sinclair added that it was important the FCA was taking the lead with the project as AMI did not want to be inadvertently seen to be introducing any anti-competitive behaviours.

He also noted that he had sympathy with lenders but that without them on board and available to lend, there was limited chance of success.

“The affordability assessment rules changes were immensely complicated and the time scales to engineer any changes were going to be very difficult for the lender population,” he said.

Sinclair continued: “The lenders have been put in a difficult position as the FCA did introduce the changes on a voluntary basis and both the government and the FCA could have done more to help.

“If there are almost no lenders who want to lend then we are stuck, but the time frame is running short. If in June no lenders are participating then it seems a little ridiculous to send administrator letters to the trapped borrowers,” he concluded.

 

‘Lenders before brokers’

FCA analysis indicated only 14,000 of the 250,000 mortgage prisoners were likely to benefit from the affordability assessment changes, however as Mortgage Solutions exclusively revealed, the regulator did not conduct analysis of the cohort of 80,000 borrowers who are either in or recently in arrears.

It believes that to be effective, a register of mortgage brokers would need to be backed by a group of lenders willing to lend and this has to come before the broker panel.

An FCA spokesperson told Mortgage Solutions: “We are determined to enable re-mortgaging for those who are eligible under our rule change, meet the criteria for lending and would benefit from doing so.

“Action from the industry is needed now and we expect lenders to support this.”

 

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