Under the changes to the Mortgage Credit Directive (MCD) if you want to describe your firm as an Independent Mortgage Intermediary after the implementation of MCD, you will need to demonstrate that you consider second charge lending as well as first charge.
A new rule, MCOB 4.4A.4R (3), states
- An MCD mortgage credit intermediary must only disclose that it is independent if its consideration of MCD regulated mortgage contracts across the market is unlimited.
MCD regulated mortgage contracts includes second charge lending.
You may already have received an MCD data collection questionnaire from the FCA or will receive one shortly. You will need to complete this using the FCA Connect system.
One of the questions will ask if you intend to ‘do second charge mortgage business.’ As stated above, to use the term ’independent’ you will need to consider second charge loans as an option. To be independent your client files will need to evidence that second charge was considered and recommended if most suitable for the client.
This applies to mortgage business only. The current independence rules for investment business remain unchanged.
Consumer Duty – FCA Live and Local events
Richard Foster Compliance EBI, FCA, Mortgage, Register
The FCA have advised they will be hosting a series of Live and Local events across the United Kingdom on the Consumer Duty from 21 February 2023 to 15 June 2023. Aimed at small and medium sized firms, the events will focus on the Retail Investment and Mortgage sectors and compliance consultants are also […]