Mortgage Market Review Changes Now in Force

The changes outlined in the FCA’s Mortgage Market Review come into being on 26th April. This newsletter will act as a reminder to firms of the changes. You should ensure that the updated processes and documents are now implemented. 

A brief high level overview of the changes is set out below. Please refer to previous ATEB news articles for more details.

For Intermediaries:

  • The non-advised sales process has been removed;
  • If there is any interaction between a firm and client then advice must be given, with only very few exceptions;
  • Execution only sales can only be carried out for high net worth and professional clients or where the lending is for business purposes;
  • The requirement for intermediaries to assess affordability has been removed;
  • The compulsory requirement to issue an IDD has been removed from the rules;
  • The firm must issue the client with key messages about the firm’s service;
  • Key trigger points when a firm has to issue a key facts illustration have been implemented:

For Lenders:

  • It is the lenders responsibility to assess affordability;
  • Lenders have to verify declared income;
  • Interest-only loans can still be granted, but only where there is a credible repayment strategy.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

The Financial Conduct Authority has given the industry plenty of time to prepare for the MMR; please don’t get caught out.

Action Required By You

  • Ensure all new disclosure documents and processes are implemented from 26th April 2014;
  • Destroy any non-compliant documents;
  • Ensure all staff have received training;
  • Contact your ATEB consultant if you have any unresolved questions:

About the Author

Steve is an ATEB Director and has a deep understanding of all matter regulatory, built up over his 30 years + in the industry. With a training background and a technical brain, he overseas numerous complex projects and client implementation work.

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