LONDON - The Financial Services Authority has said that the mortgage lenders and brokers are breaking rules by not informing homebuyers about the new regulations on disclosure.
These facts came to light after a mystery shopping survey was undertaken by the FSA. As a part of the survey, the FSA examined whether firms were providing customers with the Initial Disclosure Document (IDD) and the Key Facts Illustration (KFI), as specified by the agency. Around 62 mortgage lenders and mortgage brokers were surveyed. The FSA found that 45 firms, that is 55 percent of the firms that were surveyed flaunted the new regulations.
Out of these, 23 firms did not provide either an IDD or the KFI, 12 firms were guilty of not providing both documents and 10 firms did give these documents to the customer, but after the time limit had elapsed.
The findings were a cause of disappointment to Clive Briault, the FSA's managing director of retail markets, who said, "These are disappointing findings. The key facts documents are designed to give customers clear, straightforward information on the services and products they are being offered to enable them to make informed decisions and to shop around. It is extremely important for all firms to comply with our regulations." He warned that strict action would be taken against those firms, which routinely failed to comply with the new regulations, "If we find that some firms continue in these failings we will take this very seriously and the appropriate action will be taken, including enforcement action if necessary." The mystery shopping report also dismissed speculations that the provision to provide the documents resulted in longer interview times.
Reacting to these findings, Chris Cummings, director general of the Association of Mortgage Intermediaries (AMI) said that they would be looking into the matter. He also said that firms needed to make it a daily practice to comply with the regulations.
Posted
on : Mon, 15 Aug 2005 13:05 GMT | Mortgages News
By : Mark Richardson
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