The Financial Conduct Authority will be producing more help for mortgage intermediaries in the form of disclosure and training prior to the implementation of the Mortgage Market Review, following adviser concerns.
From 26 April 2014, the regulator says the industry will have to “take a common sense approach to lending mortgages”, requiring checks to ensure borrowers only get a mortgages they can afford.
Around 3,660 mortgage intermediaries responded to the FCA’s second MMR readiness survey, with 15 per cent telling the watchdog they require more information on verbal disclosure and using documentation, verbal disclosure warnings, evidencing verbal disclosure and how fees should be disclosed.
Around 7 per cent of mortgage intermediaries wanted more information on advice and training and competence.
In particular, advice firms wanted more information on dealing with “rejected advice”, evidencing consideration of eligibility criteria, recording recommendations and excluding direct deals from the advice process.
Training and competence firms wanted more information on whether advisers will need to be approved persons, about supervision and monitoring advisers, as well as recording T&C.
The survey also found that 85 per cent of firms who conduct mortgage business are ready to implement the MMR on time.
A further 6 per cent of firms said they did not yet have plans in place for implementation but are confident they will be ready in time. Just 1 per cent of respondents said they would fail to meet the April deadline, but they will not be undertaking any mortgage business until they are ready.
The remaining 8 per cent of firms plan to exit the market ahead of MMR coming into force. The vast majority of these firms have written less than 100 mortgages in the last 12 months.
In May 2013, 67 per cent of companies said that they were on track to implement the MMR.
The FCA concluded that while it is “pleased” with the industry’s progress to date, “some firms still need to complete their planning and should do this without delay”.
In a statement, the FCA said: “We have used our survey to listen to the industry and we will produce more help, mainly for intermediaries. This will help firms to finalise their plans and implement successfully.”
Linda Woodall, FCA director of mortgage and consumer lending, said: “Since the survey was last conducted we are delighted to say that we have seen a vast improvement in the number of firms who consider themselves to be well prepared.
“Firms who have not yet begun planning need to do so now in order to ensure they can fulfil their requirements come April.”
