AMI has to express its disappointment that after the five year Mortgage Market Review and the two years it has taken to implement the Mortgage Credit Directive, the sector is not to be left alone. Some might applaud the FCA decision to challenge the results of its own MMR, but AMI is concerned that this will only introduce uncertainty into what is still a fragile market. 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.
Robert Sinclair, Chief Executive of AMI said
“Following the publication of final MMR rules, when certainty returned to the market, lending has gradually expanded and both consumers and lenders have chosen to do this through the intermediary channel. It is concerning to see lenders continuing to challenge the results of the MMR now through this route, as whilst it has made the process more onerous for some consumers, more now receive good advice with the full protections that this affords. AMI is concerned that the paper does not recognise the difference between a broker who works in the best interests of the customer rather than the lender who is out to shift product.
We are concerned that there is no respondents list so we can see who has contributed to this debate. However it is great news that the FCA has found that the mortgage market is now lending responsibly and that there are no issues with mortgage prisoners. This appears at odds with broker experience and that of the renowned consumer champion Martin Lewis, so no doubt the Chancellor will be assured by the FCA there will be no issues when interest rates rise. AMI considers that there remain underserved groups of borrowers in the areas of, interest only, lending into retirement, self employed, contract workers, foreign currency earners and ex-pats that still need attention if the market is to serve the whole.
AMI will of course work with the FCA to ensure that consumers can have access to effective online tools to educate and enhance their access to the widest market. We will also contribute fully to ensuring that the debate on best lender and best product for each consumer is fully informed. Whilst we have no issue with lenders selling their own products, this cannot be advice in the full sense of the word, as any solution will be from a restricted product set. The Directive 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.
We will work to ensure that any conflicts of interest in commercial arrangements are suitably managed and controlled. We are surprised to see this as an issue as we had assumed that firms that had any such concerns would have dealt with them before now. AMI does not see issues arising from the traditional procuration fee arrangement that was accepted as presenting no issues under MMR and is also enshrined within the European Mortgage Directive.”