At this year’s Mortgage Business Expo, the Financial Services Authority (FSA) Director of Conduct Policy, Sheila Nicoll, revealed forthcoming plans to ensure anyone involved in the sale of mortgages, such as those working in mortgage lender branches and call centres, will have to take the CeMAP exam. This news could mean mortgage lenders turn back towards mortgage advisors to save costs and as they might be reluctant to invest in staff who may leave following training.

Nicoll stated:

“All mortgage sellers, not just advisers, will need to hold the Level 3 mortgage qualification. We expect this, in conjunction with the approved persons proposals, to have a positive impact on professional standards.”

The exact details of the proposals are part of the FSA’s distribution and disclosure consultation paper.

In an article on the Mortgage Strategy site, director at the AMI (Association of Mortgage Intermediaries) Robert Sinclair, commented how this should be good for advisors:

“It will cause lenders to rethink their distribution and look at whether a broker-led solution is more cost-effective, particularly with regard to remortgaging.”

The role of a mortgage broker/advisor is also to change slightly, as they are identified as having some small role in assessing whether a borrower can afford the mortgage but they are to carry out appropriateness checks and eligibility tests on the potential borrower. Nicoll commented:

“Our view is that intermediaries do have a role to play in assessing affordability but that it should be limited to checking if the consumer fits the expected parameters of lenders’ affordability criteria. After all, it is the lender that has access to customers’ credit history and can request additional information if required.”

The proposals include removing the Initial Disclosure Document and instead ensuring that brokers give product information to the borrower earlier in the application process. The stage at which the Key Facts Illustration document is to be given is also being re-assessed.

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