Mortgage Regulation

Mortgage Regulation was introduced on 31^st October 2004 and replaces the previously known Mortgage Code.

Any provider or introducer of mortgage business must be authorised by the Financial Services Authority (FSA). If they are not directly authorised, they must ensure their compliance procedures are overseen by an authorised firm, who can then monitor their working policies, in line with the Mortgage Code of Business. All residential mortgages are now regulated for the first time by law, with the only exception being commercial mortgage business, which is still non regulated.

This regulation has been introduced by the FSA to ensure that mortgage customers are dealt with in a specific manner. It ensures that products offered are done in a way that is easily understandable therefore allowing the customer to be better placed to choose the mortgage that is most suitable to their requirements. These new rules not only apply to the purchase stage but also now last the length of the mortgage and affect all mortgages taken out after 31st October 2004, but not those taken out previous to that date.

As a mortgage is an item not normally undertaken on a regular basis, you may not notice any dramatic changes to the process, if you have taken one before, Whilst advertisements for mortgages may look a little different, you should clearly be able to see the key comparison feature - the Annual Percentage Rate (APR), and when looking for further details personalised to your own circumstances, you will encounter two new documents.

Initial Disclosure Document – (IDD) which you will be offered at your first point of contact with the Society. This lists what you should expect from the Society in areas such as service and advice levels fees and complaints procedures.

The other document, the Key Facts Illustration (KFI) is a personalised illustration of the particular mortgage product you have either expressed an interest in or have been advised to consider. This is an overall summary of all the issues you will have discussed during the interview process following a format that is standard throughout all financial institutions. The different sections offer a breakdown of the areas that make up the mortgage type discussed. These will include fees and early repayment charges applicable to the product and it provides a good basis from which you will be able to compare products and come to your own decision regarding whether the product is the one for you.

The Barnsley welcomes these changes, knowing that is will add another dimension to its customer service standards and ground for understanding the steps involved in the mortgage provision process.

Should you require further information please contact your Mortgage Adviser at your local branch, who will be happy to answer your queries.

BS6008 (11/04)