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Ami tells regulator to leave mortgage market alone

Ami tells regulator to leave mortgage market alone

The Association of Mortgage Intermediaries has hit back at the regulator’s latest review and its promises of more to come, calling for the “fragile” mortgage market to be left alone.

Yesterday (16 May) the Financial Conduct Authority published the results of its responsible lending review, revealing it plans further investigations into suspected conflicts of interest in mortgage advice networks.

Ami chief executive Robert Sinclair expressed his disappointment at the FCA’s stance.

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After the five-year Mortgage Market Review and the two years taken to implement the Mortgage Credit Directive, the sector be left alone, he said.

“Some might applaud the FCA decision to challenge the results of its own MMR, but Ami is concerned this will only introduce uncertainty into what is still a fragile market,” read a statement from the trade body.

“We are struggling to see the need for even a targeted market study, as the bulk of the issues could be addressed by thematic work and supervisory action.”

The FCA announced plans for a ‘targeted market study’ in the fourth quarter of this year, focused on consumer choice in the mortgage market and the impact of borrowers’ increased use of brokers.

Mr Sinclair criticised the paper for failing to differentiate between brokers who give good advice, and a sales-driven lender.

“We have no issue with lenders selling their own products, but this cannot be advice in the full sense of the word as any solution will be from a restricted product set,” he said.

“The MCD set out clear rules around panels and sets out that there must be full disclosure; the fact that a lender is, after all, a one firm panel appears lost in this paper.”

Most firms have positively applied the responsible lending requirements introduced in April 2014’s MMR, the FCA’s paper found.

But it stated more needs to be done to improve consumers’ ability to make sound choices about mortgage deals.

The Council of Mortgage Lenders’ director general Paul Smee said the finding of no significant faults in the market was testament to the level of commitment lenders showed in implementing the new requirements.

“Through our voluntary transparency initiative, working jointly with Which? we are fully engaged with the consumer choice agenda the FCA identifies as an area for study later in the year,” he added.

On the upcoming review, Mortgage Concepts Associates director Mike Richards said differences in outcomes are to be expected when comparing direct sales with using a broker.

“The main one being direct lenders can only offer their own products and their own criteria. There will often be lenders who have criteria which suits a client and rate becomes a secondary consideration.”

Nick Green, a broker at Alternative Estates & Financial Services, said increased intermediation in the market since the MMR has led to better customer outcomes.

“I have picked up more clients who have been declined by their own lender than ever in the last two or three years. The majority have not been given a reason why.