Second charge experts call on trade bodies to ‘profile raise’ sector – analysis

by: Christine Toner
  • 20/04/2017
  • 0
Second charge experts call on trade bodies to ‘profile raise’ sector – analysis
Trade bodies must do more to support the second charge market, leading industry figures have claimed.

This summer will see the launch of new ‘super’ trade body UK Finance – following the merger of Asset Based Finance Association, British Bankers’ Association, Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.

However, the Finance and Leasing Association (FLA) and the Association of Finance Brokers (AFB) – both of which represent the second charge sector – declined to join the body.

Now industry commentators have urged the organisations to do more to support specialist brokers and the second charge sector.

The only evidence we have seen of the FLA’s involvement in second charge mortgages is their monthly transaction statistics, which form a small part of their monthly consumer reports,” said Paul McGonigle, chief executive of Positive Lending. “The FLA’s monthly report is useful but it would be useful to have more detailed market information.”

Matt Tristram (pictured), co-founder and director of Loans Warehouse and Clearly Loans, said: “We don’t believe that there needs to be a new trade body, the people within the FLA and AFB have influence. We need those people to give more focus to the challenges facing the second mortgage brokers so that we all feel we have the support we need. We have the right people just not the prominence.”

Steve Walker, managing director, Promise Specialist Lending, agrees.

“In the run up to MCD the FLA and AFB worked closely together very successfully to ensure the industry was prepared for the new regime. However the membership and voice of the AFB is small by comparison and more needs to be done to raise the profile of second charges and promote best practice in the mainstream remortgage sector.

“Given the MCD requirements to consider second charges alongside a remortgage, I think we have all been guilty of expecting mortgage brokers to be more engaged. It’s now clear that the AFB, AMI and FLA can do more and I expect these organisations are evolving strategies to do exactly that. With regard to representing second charges with the regulator I think Robert Sinclair and the AFB have done a good job for their members.”

Fiona Hoyle, head of consumer and mortgage Finance at the FLA, said: “The FLA represents 90% of the second charge mortgage market, and has done so for over 20 years. Indeed, when the lenders were moved from consumer credit regulation to MCOB, our efforts on behalf of this market won an outstanding achievement award from the industry. We already work very closely with the Association of Finance Brokers and are continuing to do so.”

Meanwhile Rob Sinclair, chief executive of AMI and the AFB said discussions are taking place between the trade bodies on the issues affecting second charge.

He said: “The AFB and FLA continue to meet to discuss regulatory issues and AFB are in the process of electing a new member to the AMI board.  I discussed the second charge market with the FCA last week and we will continue to work with the AFB membership to identify core issues and work together to resolve them.”

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