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Topic: Mortgages

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EBA replies to European Commission’s call for advice on the Mortgage Credit Directive review

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

FPC confirms withdrawal of mortgage market affordability test

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

FCA portfolio letters – retail mortgage lenders and non-bank (mortgage lenders)

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

Consultation on proposal to withdraw FPC’s mortgage affordability test

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

Call for advice to the EBA regarding the review of the MCD

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

European Commission launches consultation on the Mortgage Credit Directive review

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

Updated FCA webpage – PS20/11: Policy Statement 20/11: Removing barriers to intra-group switching and helping borrowers with maturing interest-only and part-and-part mortgages

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

Commission report on the MCD

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

PRA statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme

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

FCA confirms support for mortgage borrowers impacted by COVID-19

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

FCA updates web page on Policy Statement 20/11 ‘Mortgages: Removing barriers to intra group switching and helping borrowers with maturing interest only and part and part mortgages’

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

FCA publishes PS 20/11 on removing barriers to intra-group switching and helping borrowers with maturing interest-only and part and part mortgages

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

FCA speech: Mortgages and coronavirus – enabling positive consumer outcomes

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

Mortgages and coronavirus: additional guidance for firms – finalised guidance

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

COVID-19: FCA consults on additional guidance for mortgage firms

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

FCA Call for input – Ongoing support for consumers affected by coronavirus: mortgages and consumer credit

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

FCA Consultation Paper: Removing barriers to intra-group switching and helping borrowers with maturing interest-only and part-and-part mortgages

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

FCA issues research on mortgage switching

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

EBA reviews its RTS on professional indemnity insurance for mortgage credit intermediaries

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

FCA Policy Statement: final rules and guidance on mortgage advice and selling standards

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

Understanding mortgage prisoners

On 17 January 2020, the FCA published a new webpage providing further data on the mortgage prisoner population. Key findings include: around 250,000 people are in closed mortgage books or have mortgages owned by firms that are not regulated by the FCA; FCA research shows around 170,000 of these borrowers are up-to-date with payments and … Continue Reading

Definition of a ‘legal mortgage’

On 3 December 2019, the Complaints Commissioner published its final report of 6 November 2019 concerning the FCA’s handling of an inquiry that had been made about the definition of a ‘legal mortgage’. The final report explains that the Complaints Commissioner asked the FCA to clarify an earlier statement in which it stated that it … Continue Reading
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