In an exclusive interview with Mortgage Introducer, Chris Cummings, director-general of the Association of Mortgage Intermediaries, said the regulator was about to announce a review of disclosure documentation.
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This, combined with changes proposed in the European Mortgage White Paper, set to be published this Summer, could see a re-write of both Key Fact Illustrations (KFIs) and IDDs.
Cummings said: “I think the White Paper could substantially change KFIs. We all saw the chaos and the millions of pounds that went into KFIs and that is potentially the biggest threat European legislation poses. However, the other reason we could have a review of KFIs is that the FSA is about to announce a review of disclosure. It will want to look across the retail disclosure regime and could see IDDs and KFIs being reviewed at that point.”
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Cummings admitted the KFI was still causing confusion among customers as it was too long and he would like for them to be ‘completely ripped up and started again’.
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Darren Pescod, managing director of The Mortgage Broker Limited, commented: “The FSA must be careful not to overkill on this as any more pages will mean it won’t be read by the client. If one document is replaced by another then it shouldn’t be too much of a major change for brokers, but any shortening will be a bonus.”
Robin Gordon-Walker, spokesperson for the FSA, admitted the Mortgage White Paper could have a major impact.
“We said when we launched our non-conforming sector review that we wouldn’t be making any major changes to MCOB until we had seen the Mortgage White Paper from the EU Commission this Summer. Depending on which way it goes, it could have a major impact on disclosure.”
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