Mortgages  

Smee warns MMR will lengthen advice process

Paul Smee, director general of Council of Mortgage Lenders, has warned the Mortgage Market Review will lengthen the amount of time it takes to offer mortgage advice.

In a video interview with FTAdviser education editor Emma Ann Hughes, Mr Smee, former director general of the Association of IFAs, says advisers should brace themselves for lengthier interviews and a requirement to collect more information that will lead to a proliferation in documentation.

He added that this will be a culture shock for consumers as much as advisers, which is adding to concern that the net effect of the MMR changes could be to disenfranchise many lower-value households from buying their property.

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He said: “I think we have all got to get used to a longer mortgage process, when advising on a mortgage is going to take a longer amount of time.

“One of the groups that ought to be gearing up for the Mortgage Market Review is the consumer, because I am not quite sure how customers will take the idea of lengthier interviews and more documentation.

“The affordability assessment is for real. It has to be very carefully documented and of course we are getting rid of the concept of non-advice. One of the things I would be keen to follow up in the aftermath of the MMR is to ensure that we aren’t moving into a market where only certain types of borrowers can access a loan.”

“We don’t want a market where you need a regular income and a P60 before you can get a mortgage. It has to be a different and more nuanced mortgage market than that. We will really want to do the follow up work to ensure the market does not become restricted.”

To watch the full interview with Mr Smee, click here.