New regime for mortgage regulation
Mortgage lending has today come under the regulatory control of the FSA.
12:22 01 November 2004
Mortgages have today come under the regulatory protection of the Financial Services Authority.
Lenders and intermediaries and brokers are covered by the new regime, which experts are united in seeing as a victory for consumers.
From today, anyone providing or advising on mortgages will have to be registered with the FSA, and meet consistent standards for competence.
In addition, home-buyers will be provided with new Key Fact Illustrations, outlining precisely what they are getting themselves into - spelling out the terms and conditions of their mortgages in simple terms.
The new rules apply to mortgages sold from November 1: they are not retrospective.
"The FSA has worked closely and co-operatively with the industry to ensure that firms go into the new era in a strong position," said John Tiner, chief executive of the FSA.
"Our focus now turns to the future supervision of the mortgage industry. An early priority for us will be to enforce the perimeter of the new regime and crack down on any firms that may consider continuing with unauthorised and illegal mortgage business."
However, it has become apparent that the FSA is still unsure as to precisely how many unregistered brokers and advisers are operating in the market.
Mr Tiner admitted, "An early priority for us will be to crack down on any firms that may consider continuing with unauthorised and illegal mortgage business."
A spokesperson for the FSA told the Independent newspaper, " We have not got a definitive figure for the number of mortgage brokers, we just know how many have applied to us. The job is to find those who have not come forward."
The FSA is hoping that the UK's 115 mortgage lenders will help to police the system, by refusing to deal with unregistered intermediaries.