MMR Survey deadline Extension

Just in case you haven't seen or received the email yet, the FCA have extended the deadline for the completion of the MMR survey and sent out an email late last week to this effect. This gives an extra few days to 31st May for you to complete and submit the thing if you haven't already done so.

The  following text was included in the FCA email , just for clarity:-

We sent you an MMR Implementation Survey two weeks ago.  Some firms have requested an extended deadline due to being out of the office.  Therefore we are extending the deadline for all firms, to close of business 31 May 2013. 

Please take this opportunity to update us on your progress, let us know where you need further communications and take advantage of its educational benefit.  We will not extend the deadline further.

That seems fair enough.

My understanding is that this survey has been sent to all firms who have  permissions for mortgages and so if you haven't already seen an email about two to two and a half weeks ago , or since, then perhaps something has gone wrong. I suggest that you contact the FCA via the Small Firms Contact centre to check whether you need to complete one.

This is possibly your first contact with the FCA  and you don't want to get it wrong. If you need any help then please feel free to email me at david.c.payne1@btinternet.com .

Interest only mortgages - how many?

Call me an old cynic if you like but I find it hard to believe that 90% of the sector of borrowers with interest only mortgages  have a credible  repayment strategy in place to repay the debt at the end of their mortgage term.  I am readily prepared to accept that lenders will have records that demonstrate that borrowers should have   a repayment strategy in place ranging from robust investment backed vehicle at one end to some nefarious belief in inheritance payments on the other and passing from robust to the  irrational by way of selling the property and trading down or of selling some other highly geared asset along the way.

I just hope that the research carried out on behalf of the FCA was, in its own right, sufficiently robust to test the integrity of those less than innocent statements sitting hidden away towards the end of the application form asking what means the applicants have to repay the mortgage. After all, how many ISAs have been set up to repay balances that they might never reach anyway?

It is all well and good both lenders and the FCA saying that now is the time to nip the problem in the bud but I would suggest that for many people , to run with the metaphor, that bud has now bolted and the sharp thorns of this matter will continue to catch on the already tattered sleeves of economic recovery. Perhaps it is difficult to learn from the problems of the past but when we see a whole generation of borrowers disenfranchised as a result of their own economy with the truth in respect of their incomes on self- certification, it seems a little unlikely that the same generation , at the same time, were wholly accurate and up front about how they would repay their debt at some obscure point in the future.

One can only hope that the lenders have contingency plans in preparation to deal with what will surely be a larger problem than anticipated. Perhaps an opportunity for lenders and the FCA to work together to define a product-based solution to the risk of  borrowers losing their homes.

FCA Issues MMR Survey

Yesterday, The FCA sent out a number of emails to firms regarding a survey that they want completed within 10 working days of receipt. This is Stage II of the Mortgage Market Review (MMR) Engagement Programme ( Stage I was the series of workshops that were held earlier this year). I don't think that everyone has received the emails yet  but my assumption is that they will be  addressed to all firms over the next few days. If you haven't received it, it is probably on the way. If you haven't received it by early next week, you should check you spam filters and all the usual suspects.

It is important that you respond well on this and in time. Don't forget that the FCA have indicated that they will use these types of contacts as a part of their monitoring of firms performance and risk profile. Failure to respond, or failure to respond in good time should not be seen as an option. Of course, a poor quality response doesn't go down too well either. It is also, in most cases, your first real direct contact with the FCA on a working basis: you don't want to get it wrong.

Given that this is part  of a programme, you should be  looking at what was issued by the FSA in Stage I before responding to the FCA's Stage II. For a bit of quick reference, you can refer to my blog in April headed up FCA web site and the MMR. You should also have  a look at the document issued by the FCA in Stage I that sets out their views on MMR  planning which I assume ( ah! but we know what ass-u-&- me does don't we ) that this is part of the style of questions that we can expect. The link is as follows :- http://www.fca.org.uk/your-fca/documents/fsa-mmr-planning-tool .

I should say that at this point in time I have not actually looked at the survey myself - I'll do so shortly and post another blog on this on Monday - so watch this space. I have  hopefully already contacted all my subscribing clients directly by email but if you haven't received anything from me already then please advise. Anyone out there wishing to contract a little of my time for additional support in responding to the FCA, please email me directly on my email, david.c.payne1@btinternet.com.