Mortgages and other products where there is a first charge over the borrower's residential property, such as home improvement loans, debt consolidation loans and secured credit cards. Also included would be some types of equity release loans. The FSA said it was not planning to take over regulation of buy-to-let mortgages. Ray Boulger, senior technical manager at Charcol, the UK's largest mortgage broker, while welcoming most of the proposals, questioned the FSA's decision not to take control of so-called "home reversion" plans, where a person receives a lump sum in return for assigning some or all of the home to the loan company at death.
Mr Boulger said: "The problem is that by not regulating one of the two main ways of releasing equity from a home on the grounds that it is not formally a loan, the FSA risks unqualified and unregulated people coming into the market and selling a product which in many ways is less suitable for consumers." Sarah Wilson, director of the FSA's high street firms division, said: "We want to make sure that consumers get clear comparable information on mortgages and that where they get advice they are recommended a suitable mortgage. We aim to introduce a regime that achieves this goal in a proportionate, cost-effective fashion."
The requirement to disclose mortgage commission would link the regime that applies to investment products to the home loan market. It would also tie in with proposals on the status of independent financial advisers, currently the subject of discussion papers from both the FSA and the Sandler Review of the long-term savings market. "We need to think about the retail market in a joined up way," Ms Wilson added. "It is very clear that investments, mortgages and general insurance are three very different markets that we are being asked to regulate.
"We don't start with the presumption that we need to do the same thing, but we should ask questions about it," she said. More than 12,000 mortgage intermediaries would be affected by the proposals, which are set to come into force in the summer of 2004. The FSA's proposals would see it taking over responsibility for regulating brokers from the Mortgage Code Compliance Board, a voluntary body.
Mr Boulger said: "The problem is that by not regulating one of the two main ways of releasing equity from a home on the grounds that it is not formally a loan, the FSA risks unqualified and unregulated people coming into the market and selling a product which in many ways is less suitable for consumers." Sarah Wilson, director of the FSA's high street firms division, said: "We want to make sure that consumers get clear comparable information on mortgages and that where they get advice they are recommended a suitable mortgage. We aim to introduce a regime that achieves this goal in a proportionate, cost-effective fashion."
The requirement to disclose mortgage commission would link the regime that applies to investment products to the home loan market. It would also tie in with proposals on the status of independent financial advisers, currently the subject of discussion papers from both the FSA and the Sandler Review of the long-term savings market. "We need to think about the retail market in a joined up way," Ms Wilson added. "It is very clear that investments, mortgages and general insurance are three very different markets that we are being asked to regulate.
"We don't start with the presumption that we need to do the same thing, but we should ask questions about it," she said. More than 12,000 mortgage intermediaries would be affected by the proposals, which are set to come into force in the summer of 2004. The FSA's proposals would see it taking over responsibility for regulating brokers from the Mortgage Code Compliance Board, a voluntary body.
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