Mortgage Broker Compliance
A very wise step when looking for a mortgage is to employ the use of a mortgage broker but before you do you should make sure that the one you choose is fully authorised to give you advice such as an FSA regulated mortgage broker.
The mortgage broker must be regulated by the FSA and to give you advice without being regulated is illegal. This is not the same as for instance a builder’s trade organisation which you might use to see whether the builder that you are about to use is reliable – but if they are not part of the trade organisation they can still work legally. This is not a voluntary code – certain professions have to be FSA regulated to operate and being a mortgage broker is one of them.
Mortgage Brokers Have To Be Trained With FSA Rules
The FSA compliant mortgage broker will have had to have to be trained and be fully aware of the expectations and rules of the FSA (Financial Services Authority). The mortgage broker will also be accountable to the FSA which means that the consumer has a degree of protection.
The FSA rules are in place to protect consumers, so for instance a consumer won’t be advised to take out an expensive and unsuitable mortgage simply because the broker will make more commission on it. The rules will also ensure that the consumer will be made fully aware of what commissions the broker is being paid – and who is paying them. The broker must act in the best interest of the consumer and secure them the best deal possible with the information that the borrower has given.
Broker Compliance Vs Suspension, Fines & Prosecution
The FSA can suspend, fine or even prosecute a mortgage broker who does not comply to the rules of the FSA and in so doing will try to make sure that the consumer is not given financial advice or sold a mortgage that will not be suitable to their situation.
Most mortgage brokers would see it as good for their business that consumers are given best advice even without the FSA regulation but the FSA compliance adds an extra level of consumer confidence.