Update on Mortgage Market Review (MMR)

The FCA published another update on the MMR last week, just reminding us of what it means in outline for firms.

I have  unashamedly lifted the text applicable to Mortgage Intermediaries from it and have included it below in italics.

The majority of the MMR changes come into effect on 26 April 2014.  Those that will be most relevant are:

For intermediaires

• The removal of the requirement on intermediaries to assess affordability.
• The removal of the non-advised sales process.
• Most interactive sales (e.g. face to face or telephone) to be advised.
• An 'execution only' sales process for non-interactive sales (internet and postal).
• Every seller required to hold a relevant mortgage qualification.
• It will no longer be compulsory to provide customers with an Initial Disclosure Document (but firms can continue to do this if they want to). Instead, certain key messages about a firm’s service must be given to customers.
• The Key Facts Illustration will not have to be given every time the firm provides the customer with information about a product that is specific to them.  Instead, it will only be required where a firm recommends a product or products, where the customer asks for a KFI, or where the customer has indicated what product they want in an execution-only sale.

The link to the full article is below:-

http://www.fca.org.uk/firms/firm-types/mortgage-brokers-and-home-finance-lenders/mortgage-market-review

I am not commenting on the MMR points in this blog as I am currently working on an implementation plan. I will comment as I progress. This blog is simply for information.

There is no feedback as yet on the MMR survey, which hopefully you all completed and submitted. Collation and analysis started at the FCA on 3rd June I believe and so we will hear from this in a month or so I would imagine. You will all be preparing your implementation plans  presumably (or preparing to do so). For my own clients, you will be receiving a copy of the implementation plan for your firm - you will need to tailor it slightly to your requirements and we can discuss that at the right time once you have  it.

For those of you who are not regular paid up clients, I can provide a copy of the plan to you at a cost (of course) and if you are interested, please email me at david.c.payne1@btinternet.com for more details. The plan will be available from 1st July.

Finally, on the basis of what's approaching and by when, please note the following two points also made in the article above.

Secured Loan Regulation

On 1st April 2014, responsibility for second charges will transfer to the FCA along with the wider remit of Consumer Credit Regulated loans. We already know that there is a need to apply for additional permissions for the CCA stuff and we are awaiting an action by the FCA on this in 'autumn' - their term, not mine . Presumably included in this will be  the ability to apply for permission to undertake second charge loans as they will be  FCA regulated from April 2014. It is a case of watch this space and the FCA web site on this one.

European Mortgage Credit Directive

The Mortgage Credit Directive is progressing and that will have implications for mortgages and credit sales in the UK at some time within the next two to three years. I see no point in focusing on this one at the present time as when I last looked, the Directive was not a 'done deal' as it were. We just need to be  aware that there are further potential changes waiting in the wings for after April 2014.