FCA brokers could miss out on advice
The secured loan packager stated that even if brokers have full authorisation for regulated mortgage contracts, lacking interim permissions could hold them back.
Marie Grundy, operations director of V Loans, said: “In discussing a consumer’s financial position, particularly in relation to consolidating debt as part of a remortgage application, it might become apparent that it would be better for the client to retain the existing mortgage and look at a second charge loan.
“However, without interim permissions from the FCA, introducing a client to a second charge lender or a specialist packager like us will not be possible.”
Mortgage or finance brokers need to apply for interim permissions by 31 March to offer second charge advice.
Grundy added: “Given the way in which second charges have developed into mainstream lending products with rates now starting from 5.45%, and with the impact of MMR likely to see an increase in demand for second charges, many brokers could lose out and, worse, lay themselves open to not being able to offer a truly rounded advice service.”
AMI secured an exemption for debt counselling from the FCA, yet the same will not be true for second charge lending until it becomes a regulated mortgage contract in 2016.
Robert Sinclair, chief executive of AMI, said: “It is essential that all who are discussing borrowing and credit options, even just with a view to introducing, hold a consumer credit license today.
“They will have to have applied for and hold an interim permission with the FCA from 1 April 2014. It will become clearer over the coming months who will have to move to the various full authorisation or appointed representative positions.”