When mortgages finally come under the wing of the industry regulator, the Financial Services Authority in 2004, mortgage firms authorised by the FSA will have to contribute to the Financial Services Compensation Scheme. This will bring mortgage brokers into line with other firms (such as Independent Financial Advisers and product providers) and give consumers increased protection and greater chance of recourse, should it be needed. Advisers, such as us have to pay an annual levy towards the costs of the Financial Services Compensation Scheme, just in case a firm goes 'bust'. If it does, those investors that dealt with the company can be compensated from the fund built up. Mortgage broking firms coming under FSA authorisation will also have to pay these levies from 2004. The fees are looking like £1,200 for small firms and up to £45,000 for large firms with turnover exceeding £25m.
Our View
There has been a lot of concern amongst the mortgage broking industry since the FSA released a consultation paper regarding the proposed costs of regulation for the mortgage industry. Until now, many mortgage brokers have gone without any regulation and therefore much lower costs to bear. The introduction of the Mortgage Code and compulsory examinations met with the same rumbles when it was introduced but brokers now seem settled with the rules they must comply with and the costs they have to cover. This, we are sure, will be the case with mortgage regulation. Basically, if mortgage brokers want to be seen as professionals then they must act as professionals and provide avenues for clients to take action, should it be necessary. We believe that regulation for mortgages can only benefit consumers and it will increase the professionalism of the industry yet further. Search the news archive for more on property, mortgages or the FSA. Learn more about mortgages and property in Mortgage Crazy.com. Let our independent mortgage broking service search for the right mortgage deal for you for free! If you are worried mortgages, property or related issues visit the Help Zone to find out about all the different ways that we can help you. Why not try our discount Ask An Adviser service?