New Mortgage Regulations Give Extra Protection for Homebuyers.

Industry expert spells out the main changes that will result from the recent FSA regulation of the Mortgage Market.

(PRWEB) November 27, 2004 -- Having been regulated using the Mortgage Code since 1997 (1998 for mortgage intermediaries), the mortgage industry has finally been brought under the regulative umbrella of the Financial Services Authority (FSA).

From now on, the 2.75 million UK homeowners who take out a new mortgage each year will be protected by much tighter regulation. Simon Challiner, Managing Director of Brokers Online, specialists in marketing financial services on the web, believes that this will have three very significant effects on the mortgage industry as a whole."

The first effect will be to weed out the unprincipled brokers that prey on people with credit issues and charge them extortionate arrangement fees."

The second effect, and the one that is a more widespread issue, is the extra operational costs related to FSA regulation. Meeting the new compliance regulations adds time to each application and places significant new burdens upon management. As a result brokers will have to advise clients on a much tighter profit margin. This could result in far fewer no fee intermediaries and modest fees becoming the norm. But itll take till 2005 for these chickens to come home to roost", believes Simon.

Thirdly, new borrowers can be more reassured that they will receive a fair service from intermediaries and lenders alike. For example, the new regulations insist that mortgage lenders and intermediaries check on affordability, offer clear pre-sale information so customers can shop round more easily, present price information clearly, and balance advantages and disadvantages in their mortgage literature in equal measures."

And if the borrower thinks something is wrong, they can get guidance on how to complain and redress, through two independent dispute resolution schemes: the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS).

Mortgage borrowers will also benefit from extra measures to help those who have built up mortgage arrears or are at risk of repossession.

We strongly believe in ensuring that borrowers get detailed and professional advice before choosing a mortgage" says Simon. Once they are given full guidance and independent advice tailored to their individual circumstances, its actually very hard to go wrong. But, I cant stress the importance enough of seeking independent advice. Borrowers must seek independent advice if they are going to make the most of the thousands of mortgage options available to them -- independent advice really is the only reliable way to get the best mortgage deal."

Brokers Online have teamed up with a number of independent mortgage brokers to offer customers online access to the cheapest mortgages in the UK. Internet customers fill out a simple mortgage quotation form and an impartial, independent specialist adviser calls them back with a free quotation, and free, no obligation, personal advice.

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