FSA launches crackdown on mortgage lending rules
People selling mortgages will have to possess professional qualifications as part of an overhaul of the lending market being carried out by the City watchdog, it was announced.
The Financial Services Authority is calling for all mortgage sales staff, including independent brokers and bank and building society workers, to have a relevant mortgage qualification to ensure they offer appropriate advice to consumers.
It is also proposing replacing the wide range of labels currently used to describe people selling home loans with either "independent" or "restricted", depending on whether the person offers products from across the market or from only a limited number of lenders.
Firms will also be required to disclose to customers whether they are looking at mortgages that are only available directly from the lender, to flag up the possibility that people may be able to get a better deal by going direct to a bank themselves.
The proposals are part of the FSA's controversial Mortgage Market Review under which it is shifting the responsibility of ensuring that a consumer can afford a mortgage on to the lender.
It wants to introduce tough affordability and income verification checks, including getting lenders to 'stress test' loans to take account of interest rates rises.