Mortgage brokers may charge £100 fee after regulation
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Your support makes all the difference.The Financial Services Authority (FSA) warned last night that hundreds of unregistered mortgage brokers could still be touting for business next week, even though they will be committing a criminal offence.
The Financial Services Authority (FSA) warned last night that hundreds of unregistered mortgage brokers could still be touting for business next week, even though they will be committing a criminal offence.
From Monday, the FSA takes over regulation of firms involved in entering into, administering, arranging and advising on regulated mortgage contracts. Buy-to-let and second-charge mortgages are excluded. The latter are those in which there is a prior mortgage on a property and the borrower takes out a second secured loan. Any application that is processed via an unauthorised broker is likely to be turned down by the lender, leading to delays and the possibility of a failed application being marked on the applicants credit rating.
The head of Purely Mortgages, a telephone broker partly owned by the giant US lender GMAC, said last night that from Monday borrowers should ensure they are dealing with registered firms, but warned that many of these could charge up to £100 to cover the extra costs of regulation.
Mark Chilton, Purely's chief executive, said: "Regulation is expected by the Council of Mortgage Lenders to cost an extra £99 per mortgage arranged. We predict that many smaller brokers, who do not have the technology to cope with regulation, will pass on these costs to customers in the form of a one-off fee."
He advised the public to make their own checks to ensure that a mortgage adviser is registered. Before proceeding with an application, would-be borrowers should ask to see the letter from the FSA which all authorised brokers will have.
There have been widespread predictions of delays and uncertainty, as some lenders have withdrawn part of the mortgage range until they are confident they comply with the new regime. Abbey National is among the most prominent to have done so. New products may also be held back until the new year.
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