Mortgage regulation one year on - has the FSA got it right?

The original aim of mortgage regulation was to protect the consumer, but is the consumer paying dearly for this protection and is the Financial Services Authority seen as a toothless tiger.

One year on and estimates of 40 per cent of mortgage brokers leaving the industry, is the UK mortgage industry in turmoil. Mystery shopping trips and phone calls (55 per cent of companies were still not complying with rules) along with complaints (Consumers were also given the right to a formal ruling by the Financial Ombudsman Service when things went wrong) to the FSA confirm that many advisers are still giving poor advice. The self certification mortgage has come under even closer scrutiny, mortgage fees have been rising and some consumers are feeling weighed down by excessive product literature and information overload.

The regulator set minimum standards of advice for 4,500 authorized mortgage firms and 170 lenders. However the regulator has been beset with criticism and accused of taking a soft approach to rogue advisers as about 35 per cent of the 500 complaints from home buyers have been found in favour of the consumer but with only a handful of enforcement actions taken.

Costs are another key issue for the industry ballooning from an anticipated £100 million to over £200 million. With little transparency over the way these regulatory costs are being recouped, it is unsurprising that home buyers are suspicious they are feeding through to higher fees. Industry commentators have noted that the average cost of an arrangement fee prior to regulation was about £300 whereas it is now around £500, whether this is solely down to regulation is yet to be confirmed.

Sink or swim:-
Many independent mortgage brokers have had to diversify and embrace other aspects of the financial services industry. First Mortgage Trust of Bath has totally redesigned their website at http://www.mortgage-loan-uk.net which is now fully compliant and offers commercial loans, bridging loans and personal secured and unsecured loans along with online conveyancing. Despite the governments recent u-turn on SIPP's the buy to let market remains buoyant. http://www.mortgage-loan-uk.net provide a database of over 400 general buy to let listings and a buy to let top 10, maintained and updated daily. A range of mortgage calculators are also available for the benefit of online clients. All form processing is secure on First Mortgage Trust's dedicated secure domain.

To comment or express your views on the aforementioned please visit our forum at http://www.mortgage-loan-uk.net and post. To keep up to date with the UK mortgage, property and finance market syndicate our news at http://www.mortgage-loan-uk.net/news/news.xml

This release was published on openPR.