Introduction On 2 August 2022, the Financial Conduct Authority (FCA) released its latest statement on switching in the mortgage market. Among other things the statement notes that the number of mortgage borrowers not switching their mortgage deal, when they could save money by doing so, has declined significantly since 2016. Given the rising cost of … Continue Reading
On 29 June 2022, the FCA published its Dear CEO letter setting out its supervisory strategy for lifetime mortgage providers. The FCA has reviewed the key risks of harm for lifetime mortgage providers, their consumers and the markets in which they operate as part of its approach to supervision. This follows a previous review, and … Continue Reading
On 23 June 2022, the European Banking Authority (EBA) published an Opinion and Report in response to the European Commission’s call for advice (CFA) on the review of the Mortgage Credit Directive (MCD). The CFA covered 17 questions across 7 topical areas, which were the evaluation of the MCD, digitalisation, ways to facilitate the cross-border … Continue Reading
On 20 June 2022, the Bank of England confirmed that it will be withdrawing its mortgage affordability test recommendation. The withdrawal will come into effect from 1 August 2022. The mortgage affordability test was introduced in 2014 to guard against a loosening in mortgage underwriting standards and a material increase in household indebtedness. The test … Continue Reading
On 11 March 2022, the FCA published a letter (dated 15 February 2022) which it sent to firms in its retail mortgage lenders (RMLs) portfolio. The letter sets out: The FCA’s views on the key risks of harm for RMLs’ mortgage customers over the next 2 years. The key risks of harm are supporting mortgage … Continue Reading
On 11 March 2022, the FCA published a letter (dated 11 March 2022) to firms within its building societies portfolio. In the letter the FCA provides an: Updated view of the current key risks of harm and outlines its expectations of societies. Overview of its supervisory strategy and programme of work to ensure that firms … Continue Reading
On 28 February 2022, the Financial Policy Committee (FPC) issued a consultation seeking views on the withdrawal of the mortgage affordability test. In 2014 the FPC issued two recommendations that sought to prevent a loosening in mortgage underwriting standards and a material increase in household indebtedness that could amplify an economic downturn. The recommendations introduced … Continue Reading
On 14 January 2022, John Berrigan, Director-General for FISMA, sent a letter to the Chairperson of the European Banking Authority (EBA), José Manuel, requesting the EBA to deliver advice regarding the review of Mortgage Credit Directive (MCD). The letter refers to a report that the European Commission (Commission) published last May in accordance with the … Continue Reading
On 22 November 2021, the European Commission announced it was launching a public consultation on the Mortgage Credit Directive review. The Commission explains that it is seeking to establish whether the current rules are adapted to digitalisation, the need to enhance sustainability and COVID-19. The Commission is also looking at ways to improve the existing … Continue Reading
On 8 September 2021, the FCA updated its webpage on Policy Statement 20/11: Removing barriers to intra-group switching and helping borrowers with maturing interest-only and part-and-part mortgages to reflect the fact that the temporary guidance on maturing interest-only and part-and-part mortgages will expire on 31 October 2021 and will not be extended. The FCA states … Continue Reading
On 11 May 2021, the European Commission published a report that it had sent to the European Parliament and the Council on the review of the Mortgage Credit Directive (MCD) together with an annex. The report has been prepared under Article 44 MCD, which requires the Commission to review the effectiveness and appropriateness of the … Continue Reading
On 19 April 2021, the PRA issued a statement providing information on capital, notification, disclosure and reporting requirements for loans under the Mortgage Guarantee Scheme (MGS) as set out in relevant UK legislation. The statement covers: Firms using the Standardised Approach to credit risk for the underlying mortgage loans. Firms using the Internal Ratings Based … Continue Reading
On 17 November 2020, the FCA updated its guidance to firms setting out enhanced support that should be available to mortgage borrowers experiencing payment difficulties as a result of the COVID-19 pandemic. The updated guidance will be fully in force from 20 November 2020 but the FCA encourages firms that are able to start providing … Continue Reading
On 17 November 2020, the FCA updated its web page regarding Policy Statement 20/11 ‘Mortgages: Removing barriers to intra group switching and helping borrowers with maturing interest only and part and part mortgages’ (PS20/11). The update states that the FCA has issued an updated version of the guidance in relation to delaying the capital repayment … Continue Reading
On 29 October 2020, the FCA published a Dear CEO letter it had sent to those firms allocated to the Mortgage Intermediaries portfolio. In the Dear CEO letter the FCA: Sets out its view of the key risks mortgage intermediaries pose to their consumers or the markets in which they operate. Outlines its expectations of … Continue Reading
On 22 October 2020, the FCA published Policy Statement 20/11: Removing barriers to intra-group switching and helping borrowers with maturing interest-only and part-and-part mortgages (PS20/11). In Consultation Paper 20/13 (CP20/13), the FCA set out its concerns about a possible barrier in its rules to borrowers in ‘closed’ mortgage books (books which are closed to new … Continue Reading
On 8 October 2020, the FCA published a speech by Jonathan Davidson (FCA Executive Director of Supervision – Retail and Authorisations) entitled Mortgages and coronavirus – enabling positive consumer outcomes. Key points in the speech include: The FCA is hearing from some firms a desire to move from the ‘crisis’ approach taken so far during … Continue Reading
On 14 September 2020, the FCA finalised its additional guidance setting out how firms should provide tailored support to mortgage borrowers who have benefitted from payment deferrals under its June 2020 guidance and who continue to face financial difficulties, as well as those whose financial situation may be affected by coronavirus after 31 October 2020. … Continue Reading
On 26 August 2020, the Financial Conduct Authority (FCA) published a guidance consultation containing additional draft guidance for mortgage firms in light of the COVID-19 pandemic. It sets out the FCA’s expectations in relation to the fair treatment of mortgage borrowers who are experiencing financial difficulty as a result of the pandemic. This guidance is … Continue Reading
The COVID-19 pandemic is continuing to present challenges across the board with regional lockdowns, closures of “air-bridges” and talks of a second wave dominating media outlets at the present time. If the pandemic has brought certainty in one regard, it is that the future is more uncertain than ever. In order to help provide further … Continue Reading
On 28 July 2020, the FCA issued a statement on mortgage prisoners, and a Consultation Paper setting out proposals intended to support some consumers in the mortgage market. The statement presents the further analysis the FCA has done on borrowers with inactive firms, including mortgage prisoners. It sets out the actions the FCA has already … Continue Reading
On 10 March 2020, the FCA issued its latest research into mortgage switching and how consumers can be encouraged to seek out better deals. Specifically, the FCA has published: Mortgage switching research report; Occasional Paper 54 on the characteristics of consumers who do not switch; and Occasional Paper 55 on brand loyalty in the mortgage … Continue Reading
On 28 February 2020, the European Banking Authority (EBA) published a report on a review of the regulatory technical standard (RTS) specifying the minimum monetary amount of the professional indemnity insurance (PII) or comparable guarantee for mortgage credit intermediaries. The report has been developed in accordance with Article 29(2)(a) of the Mortgage Credit Directive (MCD), … Continue Reading
On 31 January 2020, the FCA published Policy Statement 20/1: Mortgage advice and selling standards: feedback to CP19/17 and final rules (PS20/1). In PS20/1 the FCA will make it easier for firms to present mortgage options to customers without providing regulated advice. In PS20/1 the FCA sets out final rules and guidance in the following … Continue Reading
