United Kingdom

Topic: Mortgages

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FCA research report on buying a mortgage without advice

On 8 May 2019, the FCA published a research report produced for it by Revealing Reality on buying a mortgage without advice. The report follows research that explored with recent mortgage applicants how appealing and how clear they found several existing execution-only disclosure documents. The research found execution-only customers generally understood that they were selecting … Continue Reading

FCA consults on changes to mortgage advice rules to encourage consumer choice

On 7 May 2019, the FCA published Consultation Paper 19/17: Consultation on mortgage advice and selling standards (CP19/17). In CP19/17 the FCA sets out proposed changes in its mortgage advice and selling standards to address three harms identified through the FCA’s Mortgages Market Study: the FCA’s advice rules and guidance are a barrier to the … Continue Reading

EBA adds MCD to single rulebook Q&A tool

On 25 April 2019, the European Banking Authority (EBA) published a press release announcing that it had updated its Interactive Single Rulebook and Q&A tool with the Mortgage Credit Directive (MCD). The update allows users to review all the EBA’s final Technical Standards and Guidelines associated with the MCD by navigating through the Directive on … Continue Reading

FCA consults on changes to responsible lending rules and guidance following mortgage market study

On 26 March 2019, the FCA published Consultation Paper 19/14: Mortgage customers: proposed changes to responsible lending rules and guidance (CP19/14). By way of background, the FCA is concerned that some consumers cannot switch to a more affordable mortgage despite being up-to-date with their mortgage payments. This includes those who cannot switch because of changes … Continue Reading

PRA and FCA consult on changes to mortgage reporting requirements

On 13 December 2018, the FCA and PRA jointly published a consultation paper setting out proposed changes to mortgage reporting requirements (FCA CP18/41, PRA CP30/18). The joint consultation will be directly relevant to: mortgage lenders, home finance administrators and entities that own mortgage books but which are not authorised to lend. The consultation is also … Continue Reading

FCA Thematic Review on the management of long-term mortgage arrears and forbearance

On 6 December 2018, the FCA published a webpage providing the findings of Thematic Review 18/5: Management of long-term mortgage arrears and forbearance (TR18/5). The publication of TR18/5 follows an FCA review which specifically focused on firms’ interactions with customers with mortgage arrears of greater than 12 months. The regulator looked at firms’ arrears management … Continue Reading

FCA publishes findings of review into complaints handling by non-deposit taking mortgage lenders and mortgage third-party administrators

On 15 August 2018, the FCA published a webpage providing the findings of its review of how non-deposit taking mortgage lenders and mortgage third-party administrators handle complaints. The findings of their review are as follows: firms generally have a positive attitude towards complaints root cause analysis, however it isn’t always clear how firms use their … Continue Reading

Mortgage lenders’ commit to help longstanding borrowers on reversion rates

On 31 July 2018, UK Finance announced that 59 authorised lenders representing 93% of the UK’s residential mortgage market have agreed common standards to help existing borrowers on reversion rates who are up-to-date with repayments but, because of stricter affordability criteria, are currently ineligible to move to an alternative product provided by their lender. For … Continue Reading

FCA Dear CEO letter- second charge lenders and responsible lending

The FCA has published a Dear CEO letter asking the CEOs of firms that enter into regulated second charge mortgage contracts to review their firm’s mortgage lending processes and confirm to the regulator, by 1 May 2018, that the firm is lending responsibly and that its processes, systems and controls ensure this. The Dear CEO … Continue Reading

FCA thematic review of interest-only mortgage customers

The FCA has published Thematic Review 18/1:The fair treatment of existing interest-only mortgage customers (TR18/1). In TR18/1 the FCA shares the results of its thematic work in which the regulator examined how lenders were treating customers who have interest-only mortgages. Specifically, the thematic review looked at how lenders are working to help customers avoid the … Continue Reading

FCA interim report on mortgage market study delayed

On 12 December 2016, we blogged that the FCA launched Market study 16/2: Mortgage market study to consider whether competition in the mortgage sector can be improved to the benefit of consumers. The FCA has announced that it will now publish its interim report on the mortgage market study in Spring 2018. View FCA interim … Continue Reading

Finalised guidance on fair treatment of mortgage customers in payment shortfall and impact of automatic capitalisation

The FCA has published Finalised Guidance 17/4: The fair treatment of mortgage customers in payment shortfall: impact of automatic capitalisations (FG17/4). The guidance in FG17/4 is primarily aimed at residential mortgage lenders and administrators of regulated mortgage contracts. It follows an earlier FCA guidance consultation which was published in October 2016 which is blogged here. … Continue Reading

Bank of England Act 1998 (Macro-prudential Measures) Order 2016 published

There has been published on the legislation.gov.uk website, The Bank of England Act 1998 (Macro-prudential Measures) Order 2016. The Order confers on the Financial Policy Committee (FPC), the UK’s macro-prudential authority, powers to direct the PRA and FCA to take action with respect to loan-to-value (LTV) ratios and interest coverage ratios (ICRs) for buy-to-let mortgages. … Continue Reading

Home finance customers with a payment shortfall: PS16/25

The FCA has published Policy Statement 16/25: Home finance customers with a payment shortfall: minor Handbook changes and feedback to CP16/16 (PS16/25). PS16/25 will be of interest to firms administering mortgages or home purchase plans (HPPs) and trade bodies for these firms. Those who support the provision of these services may also be interested. In … Continue Reading

PRA and FCA jointly consult on amendments to notes for completion of the MLAR

The FCA and PRA have issued a joint consultation paper that sets out proposals for updating the PRA’s notes to the Mortgage Lenders & Administrators Return (MLAR), the notes for completion of the MLAR in the FCA’s Supervision manual (SUP) and the MLA-D1 form for reporting second charge lending (also in SUP). The proposals in … Continue Reading

FCA launches market study on competition in the mortgage sector

The FCA has launched a market study to consider whether competition in the mortgage sector can be improved to the benefit of consumers. The market study will explore two questions: At each stage of the consumer journey, do the available tools (any sources of help a consumer may use when shopping around or choosing a … Continue Reading

PRA publishes updated Supervisory Statement on building societies’ treasury and lending activities

In April 2016, the PRA published Consultation Paper 12/16: Supervising building societies’ treasury and lending activities (CP12/16). In CP12/16 the PRA set out proposed changes to Supervisory Statement 20/15: Supervising building societies’ treasury and lending activities (SS20/15). SS20/15 sets out the PRA’s expectations in respect of building societies’ compliance with the requirements of the Building … Continue Reading

FCA modifications by consent for hybrid lifetime mortgages

The FCA has published a modification by consent relating to hybrid lifetime mortgages and the application of a new rule in chapter 9 of the Mortgages and Home Finance Conduct of Business sourcebook (MCOB). An accompanying FCA webpage explains that it has made the modifications because it does not consider that an affordability assessment is … Continue Reading

FCA Policy Statement on the future regulatory treatment of CCA regulated first charge mortgages

The FCA has published Policy Statement 16/7: Future regulatory treatment of CCA regulated first charge mortgages (PS16/7). Last November the FCA consulted on the future regulatory treatment of first charge mortgages which were entered into before 31 October 2004 and are regulated under the Consumer Credit Act 1974 and the FCA Consumer Credit sourcebook. In … Continue Reading

FCA publishes consultation on the future regulatory treatment of CCA regulated first charge mortgages

The FCA has issued a consultation paper that sets out proposed rules for firms administering or performing activities in relation to variations of first charge mortgages regulated under the Consumer Credit Act 1974 (the CCA). The consultation paper is entitled Consultation Paper 15/36: Future regulatory treatment of CCA regulated first charge mortgages (CP15/36). In CP15/36 … Continue Reading

FCA Policy Statement on implementing the MCD and regulatory framework for second charge mortgages

The FCA has published Policy Statement 15/9: Implementation of the Mortgage Credit Directive and the new regime for second charge mortgages, feedback to CP14/20 and final rules (PS15/9). In PS15/9, the FCA summarises the feedback it received to its September 2014 consultation on implementing the Mortgage Credit Directive (MCD) and sets out its final rules … Continue Reading
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