ea Consulting Group welcomes the opportunity to respond to the questions raised in the above consultation paper covering the various reforms proposed as a result of the recent Mortgage Market Review (MMR).
We have been a regular contributor to the RDR debate since it was announced in June 2006 and have advised a number of clients on retail strategy and simplified advice processes. We have been involved with the Mortgage Market Review since its inception during 2009 and, of course, responded to the original discussion paper DP09/3. During 2011 submissions were also made to the European Commission concerning PRIPS, MiFID-2 and IMD-2.
Whilst our detailed responses to the questions asked in CP11/31 are to be found in the appendix we believe it appropriate at this stage to provide some more general commentary on the MMR. Firstly, the FSA is to be commended for consulting at this stage on the entire package of MMR reforms, including the responsible lending and distribution and disclosure proposals debated last year, as the reader benefits greatly from this wider perspective. It should also not be forgotten that, for the vast majority of consumers, the mortgage market in the UK has operated to their full satisfaction despite more general resentment towards the banking industry. However, we do appreciate the requirements of the regulator in eliminating areas of potential consumer detriment and in combating future volatility in the marketplace. We very much welcome the improvements in arrears handling and the added protection given to economically vulnerable groups.
For our part, ea Consulting Group has consistently championed a transparent and proportionate mortgage regime delivering optimal consumer protection within a cost-effective environment. Ultimately, borrowers must retain the full responsibility for their mortgage lending. Equally, they should be aware of all the key information and the risks involved prior to commitment so that a truly informed choice can be made. The post-MMR landscape is rightly to be focused on affordability. Disclosure is still not perfect but this is an issue that also applies to investment and insurance sales.