The Financial Services Authority has finalised plans to bring secured loan lending under its wing – much like regular residential mortgages, soon secured loans will fall under the glare of the Government’s financial watchdog.

The Association of Finance Brokers says stretching regulation so as to cover second charge mortgages as well as first charge loans is a good thing for borrowers.

Robert Sinclair, director of AFB, says: “We fully support this announcement as we have long been calling for an alternative regulatory regime under FSA. In our view this will benefit brokers, lenders and consumers. We welcome the fact the Government and the regulators have listened to brokers in seeking to deliver a better environment for business and consumers.”

Brokers know secured loans – they understand how they work, who needs them and what you need to do to make the most of them. So when brokers say regulation of secured loans by the FSA is a good thing, you know it will benefit their clients – which means you.

But what will it do? Well it will make sure, first and foremost, that you are protected. Regulation by the FSA will mean that secured loan lenders and brokers must, by law, treat all their customers fairly and must also make sure that any loans are the right choice. But it will also make sure all the loans are created with the borrower in mind, it will make sure that brokers and lenders are not making too much money from you and it will make sure that you have recourse if something goes wrong.

Ask your broker about the new regulatory regime. Most good brokers, like The Mortgage Broker Limited, are already regulated by the FSA. They know how it works, they know what their job is and they know that their main remit is to make sure that you are getting hold of the best financial products possible.

SOURCE: AFB, FSA, 25/11/09

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