MortgagesApr 22 2014

Mortgage advisers told to conduct periodic checks

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In a 15-page document, the Association of Mortgage Intermediaries, the Council of Mortgage Lenders and the Intermediary Mortgage Lenders Association have told advisers they must conduct periodic checks on their recommendations.

The three trade associations have published an updated guide on how to meet Mortgage Market Review requirements, just four days ahead of the new rules coming into force.

Pre-sale, the intermediaries are told in the document that they must undertake marketing and lead generation activities with full recognition of the target market for each of the lender’s products and services offered.

Advisers are told they should also give pre-sale feedback to lenders if products seem unsuitable for customer groups suggested by the lender. Where appropriate, advisers are also told to identify gaps in the market and feed back to lenders and participate in product design discussions.

At the point of sale, intermediaries are told they should consider what impact the selection of a specific lender could have on the customer in terms of charges, ‘go to’/reversion rates, or possibly, where information is available how well the mortgage provider deals with queries and complaints.

Intermediaries are told they should also retain evidence to show that applications submitted met the lender’s published criteria.

Post-sale, the document states advisers should conduct periodic checks, proportionate to the business, using management information to be satisfied that product sales are suitable and that agreed service commitments are being met.

Where the intermediary carries out ongoing monitoring of lenders and identifies poor customer treatment, the document states they may consider removing the mortgage provider from their panels and raise the issues with the FCA.