The FSA has predicted that lenders will be incentivised to use direct-only distribution channels following the implementation of the mortgage market review.
In the final MMR consultation paper, the regulator proposes to make lenders responsible for affordability assessments and verifying income and says this could lead to the balance shifting in favour of direct deals.
The latest consultation paper states: “By giving lenders the responsibility to verify income and assess affordability, lenders might be expected to become more involved in the application process. This could lead them to prefer direct sales over introduced sales.”
Under the proposals, the FSA has agreed on “a general requirement” for intermediaries to check if a customer fits a lender’s criteria, although it will not stop them from conducting further affordability checks.
In a previous paper the FSA had proposed to prohibit intermediaries from conducting affordability checks.
Richard Deacon, Sales & Marketing Director at Masthaven said:
“Masthaven has always been a business that prides itself on the relationship that we have with our introducers. The bridging market is often a difficult one to understand for the layman and the introducer on the whole does a pretty good job of educating the end user on the uses of bridging finance. There will be times of course when the client contacts us directly, especially as the industry is getting more column inches in the mainstream press, but Masthaven is committed to the long term future of the intermediary market and can see the relationship blossoming as more brokers switch on to what is a very useful tool to have in their armoury.”