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MSE News: Homebuyers' understanding of mortgages to be reviewed by the regulator

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Former_MSE_Faye
Former_MSE_Faye Posts: 147 Forumite
edited 13 December 2016 at 10:10PM in Mortgages & endowments
The financial watchdog is to consider whether homebuyers currently have enough information to choose mortgages...
Read the full story:
'Homebuyers' understanding of mortgages to be reviewed by the regulator'
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  • amnblog
    amnblog Posts: 12,494 Forumite
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    More unnecessary interference.


    The Regulator already provides more than sufficient protection to the borrower.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    What struck me on reading the FCA document was the fairly minimal intent to investigate the harm done to consumers by the FCA's actions in the form of restricting choice - effectively eliminating interest only mortgages say, shifting money from discounts for consumers to incentives for brokers and in practice reducing the information available to capable consumers to act on their own to bu suitable products.

    The FCA has in effect created an FCA mortgage tax paid to brokers and seems inclined to celebrate rather than condemn its increasing payment rate.
  • amnblog
    amnblog Posts: 12,494 Forumite
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    jamesd wrote: »
    shifting money from discounts for consumers to incentives for brokers


    If this has happened, I am still waiting for my 'incentives'.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • dunstonh
    dunstonh Posts: 116,885 Forumite
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    It will be like the usual FCA outcome.

    1 - Totally ignore the real issues that impact on consumers.
    2 - Focus on irrelevant points or micro-manage the insignificant
    3 - result in greater paperwork for consumers and brokers/lenders
    4 - increase the cost of distribution to the detriment of the consumer
    5 - undermine consumer confidence in financial services further by allowing a spin on the outcome to be used by the media.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • kingstreet
    kingstreet Posts: 38,828 Forumite
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    We've moved from posting a paper application to a lender to keying the application onto the lender's system for them, uploading all the supporting documentation and the lender basically getting the valuation done and issuing the offer.

    The procuration fees 10 years ago were between 0.30% and 0.35% and they are exactly the same today.

    Our workload has increased dramatically and our remuneration has stayed the same.

    Last L&G Mortgage Club survey suggested that the average hours per case has increased post-MMR to nearly 14.

    On a (eg) £150k case with £525 procuration fee, that's £39.50 per hour and from that all the costs have to be met and a profit made.

    I bet lender direct business doesn't function at that level of income per hour.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • amnblog
    amnblog Posts: 12,494 Forumite
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    kingstreet wrote: »
    I bet lender direct business doesn't function at that level of income per hour.


    Not when they charge £999 for a computer to allocate a rate to a mortgage in 5 milliseconds.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    amnblog wrote: »
    If this has happened, I am still waiting for my 'incentives'.
    I commend your decision to work for no financial remuneration. Usually broker firms charge fees or take commission.

    Further, it was observed by the FCA that the structure of the market led to bigger firms getting better deals, which naturally would disadvantage the smaller firms.

    The FCA set up a system driven by money paid to introducers rather than to consumers and their financial benefit.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    kingstreet wrote: »
    Our workload has increased dramatically and our remuneration has stayed the same.
    Properties have increased in value substantially in general over the last ten years, above inflation, so the same percentage cut of the deal would result in a larger inflation-adjusted remuneration per deal done.

    Hourly pay may well be a different story but that would depend on the mixture of people at any particular broker, how efficient their processes are and how much of the remuneration ends up wit h the staff rather than the firm.

    In effect you appear to be saying that the FCA's regulatory action and lender shifting of work to brokers has increased the charges that consumers have to pay directly or indirectly to middlemen as the cost of the regulation, while you haven't been gaining per hour because of the increased hours that the consumers are paying for. Which I suppose is a significant consumer detriment.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    jamesd wrote: »
    What struck me on reading the FCA document was the fairly minimal intent to investigate the harm done to consumers by the FCA's actions in the form of restricting choice - effectively eliminating interest only mortgages say, shifting money from discounts for consumers to incentives for brokers and in practice reducing the information available to capable consumers to act on their own to bu suitable products.

    The mortgage lenders became retailers rather than bankers. Making the necessity of regulation imperative. There's plenty of historic issues yet to be resolved.
  • amnblog
    amnblog Posts: 12,494 Forumite
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    The Regulator is very keen on Regulation, and in multiple layers.


    They seem to have found an angle for a little more.


    Some of the cost inevitably rests with the Consumer.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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