Safe as houses: how the FCA approach regulated mortgage contracts
With all the kerfuffle surrounding consumer credit regulation, the mortgage market has obviously been feeling a bit left out, as they’re now introducing a raft of new legislation themselves. The Mortgage Credit Directive (MCD), which will be in place from the 31st of March 2016, provides an EU regulatory framework of conduct rules for firms involved in the sale of first and second charge mortgages.
These changes will almost certainly affect all professionals in the bridging finance sector, particularly as the second charge mortgage market is growing year on year. With rates sometimes reduced to lower than 5% and an increasing flexibility around criteria, it’s clear why the second charge mortgage sector shows no sign of slowing down.
However, in addition to changing classification surrounding buy-to-let mortgages in particular, there are also likely to be changes needed to your mortgage advice process, to ensure you stay compliant. At first glance, the process looks fairly straightforward; just four simple steps;
• Advising and selling standards
• Responsible lending
• Pre-app disclosure
• Training and competence
However, those of you who are now familiar with the way in which the FCA operates will not be surprised to hear that this is a veritable Russian doll of regulation, with many further areas of guidance lying beneath those four bullet points.
Book your place on our bespoke webinar ‘Regulation of Regulated Mortgage Contracts; an examination of the Mortgage Credit Directive’s impact on brokers business’, by clicking here
The MCD is likely to require some significant adjustments in business operations for the majority of bridging finance firms. In order to help you understand these changes, and determine how to practically build them into your processes, the SimplyBiz Group, is hosting a webinar for AOBP Members on Monday the 21st of September at 10am. To book your place, please click here . The online event, hosted by SimplyBiz Group Head of Compliance Policy Richard Nuttall, will cover all areas of the MCD, from the background of the regulation right through to how to meet your training and competence requirements.
If you have any questions on the information in this article, or any other area of regulation or compliance support, please don’t hesitate to get in touch with the Consumer Credit Centre team on 01484 443424.
David Golder
Client Proposition Director
Consumer Credit Centre
SimplyBiz Group