Facts Related to Mortgage Regulations

In this fast growing world, there are many people in the world who take loans for fulfilling their needs and wants of life. One kind of loan is the mortgage loan. The mortgage loan is considered to be a loan which is secured by the real property with the help of mortgage note that evidences the existence of the loan and also the encumbrances of the realty through the granting of the mortgage that secures the loan. This kind of loan is normally taken by the buyer of a house or a builder who either purchases it or secures it against the property from a financial institution. The mortgage loan is provided on the basis of mortgage regulations. These regulations are provided by the Financial Services Authority, which is also known as an FSA. Basically, the role of the FSA is to oversee the regulations of the financial services.

Main statutory objectives of FSA in relation to mortgages

Some of the statutory objectives of the Financial Services Authority include

  • Promoting the public understandings of the mortgage system
  • Maintaining the confidence in the mortgage system
  • Reducing the scope of the financial crime

Main features of the regulations under the Financial Services Authority
The regulations which are laid down by the Financial Services Authority are statutory. If any person or organization found breaking these rules are subject to discipline which includes bans, fines and even jail in some cases. Some of the features of the regulations include

1

The rules prepared by the Financial Services Authority cover sales, advices, promotions and even advertising
All the mortgage advisors should be properly trained and professionally qualified
All the mortgage advisors, no matter they are a lender or a broker should be completely authorized and regulated by the Financial Services Authority

In case of the mortgage sales and promotions, the Financial Services Authority is highly keen for bringing out the clarity in the mortgage market.

Definition of IDD

An IDD is the Initial Disclosure Document which is provided to the borrower at the first meeting. If the borrower contacts via a telephone, then the key points of the IDD are summarized and a written document is provided to them in the next five working days.

What is KFI

KFI, which is also known as Key Facts Illustration and is another important document as per the mortgage regulations. A mortgage lender or a broker must provide an accurate KFI document before mortgage application has been prepared. The Key Facts Illustration document is considered to be an important document and it should include the total cost of the loan which is to be repaid, associated fees or commissions, risk of rate to be changed and event the impact of the payments.

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