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Secured loans
A call for second charge mortgages to come under the same regulation as the wider mortgage industry has been backed by Money Partners.
Bob Sturges, director of communications at the secured loan provider, said it agreed regulation of secured loans should be placed in the hands of the Financial Services Authority (FSA). The issue was raised recently by a broker at The Mortgage Event 2005 in Glasgow
Currently, secured loans are under the control of the Office of Fair Trading, and the Consumer Credit Act. Sturges said: "It is our view that it would be better for the industry, better for intermediaries and better for customers if there was a single regulator."
Sturges said providers and intermediaries offering both mortgages and secured loans had to work to two different sets of rules. He said: "That is not efficient in terms of time, the amount of material that has to be produced or cost to the industry."
According to Sturges, statutory regulation had helped improve the reputation of the industry and, as a result, a number of packagers and larger broker firms have now moved into secured loans. He said: "We are seeing very strong evidence that a number of mortgage packager and large mortgage broker businesses, which previously focused entirely on first mortgages, are now beginning to take a much greater interest in the merits of secured loans."
Mike Pendergast, director at Zen Financial Services, said: "Basically a secured loan is the same product as a mortgage, it is just a loan secured on property. There is no real reason why it should not be treated in the same way from a regulatory point of view
Source: Mortgage Solutions Magazine
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