The workshop was held a day after the publication of the FSA’s paper and was designed to provide Paradigm members with a wealth of information about the proposals to date, their impact for brokers, lenders and consumers, and how the industry was likely to react to the suggested changes.
At a well-attended event, attendees were provided with an economic overview from Richard Froud, Senior Economist at Barclays; a lender’s view of MMR from Justine Gainer, National Account Manager at Northern Rock; the trade association take on the proposals from Robert Sinclair, Director of AMI; and finally a look at adviser responsibilities around individual authorisation from Graeme Stewart, Principal Compliance Consultant at Paradigm Partners LLP.
The workshop took place in London with more events planned to take place around the country in the near future.
Bob Hunt, Chief Executive of Paradigm Mortgage Services, commented:
“It’s safe to say that all those members and speakers who attended our first Paradigm MMR workshop were broadly positive about the contents of the FSA’s Distribution and Disclosure paper.
"Clearly, there are issues to address particularly for lenders around the potential cost of these proposals and their appetite to meet those costs and how this will be factored into their distribution strategies. Certainly, the feeling in the room was that intermediaries could see an upturn in mortgage business because of the greater cost and resource pressures that lenders are going to be faced with.
“As our speakers outlined there is a raft of proposals to consider and the true impact of the MMR on all stakeholders has yet to be understood. We are supportive of some measures whilst being of the same opinion as Robert Sinclair of AMI that the implications of European regulation have not truly been factored into the equation.
"Also, given that there is already likely to be slippage in terms of the deadline for individual authorisation, plus there is no set timetable for MMR implementation, there is a danger that we have too much of an uncertain situation about what is coming and when. It is likely that our summary of MMR will change as the MMR changes and this is why we intend to hold future workshop dates into next year so we are able to keep our members completely up to date with developments.”
Speaking about the timescale for MMR and its implications at the Paradigm workshop, Robert Sinclair, Director of AMI, said:
“There is no date yet for any part of the MMR’s implementation. It may well be 2012 before any of this comes in and the FSA and Treasury certainly want to see a better housing market before they implement it. There is also many other considerations which will impact on the MMR notably the European dimension.
"For example, the EU has a very different take on the role of advisers and their importance than the FSA plus we are awaiting an EU Directive on both borrower and lender responsibility. However, there is much to welcome in the latest paper and its proposal that all mortgage sellers will need to be qualified is positive news given that it will not just change the behaviour of those who work in banks’ call centres and branches, but will also change the landscape in favour of brokers.
"One worry is that we are not talking about the customer more in these proposals. After all, who is on the side of the customer? It is the adviser and the FSA should not forget this.”
Neil Stephens, Senior Mortgage Adviser at Paradigm member firm, Welbeck Mortgages, said:
“Overall the impact of the MMR on the broker community should be positive in terms of an increase in business levels. Lenders certainly won’t want the increased costs that the MMR proposals will bring in areas such as staff training and T&C, and I can certainly see them using intermediaries much more to generate cost-effective business.
"For advisers the administrative burden will increase and I anticipate us having to produce more comprehensive client files, however this will be worth it if we do get a greater share of distribution.”
