On 21 February 2024, the Financial Conduct Authority (FCA) published a webpage outlining its working group on interest-only (IO) mortgages. The FCA is working with 12 mortgage lenders and administrators to continue its work in the interest-only mortgage market. The group’s primary purpose is to support and inform the FCA’s review of its existing IO … Continue Reading
On 11 December 2023, the European Banking Authority (EBA) published a peer review report on the supervision of creditors’ treatment of mortgage borrowers in arrears under the Mortgage Credit Directive (MCD), which assesses the conduct supervisory approaches of competent authorities in this area. The review, which was developed in response to the current economic conditions … Continue Reading
On 19 April 2023, the FCA published a speech by its Director of Retail Banking, David Geale, delivered at the London Institute of Banking and Finance mortgage conference at Congress Centre, London. The speech discusses the FCA’s view of green mortgages. Mr Geale begins by defining a green mortgage, as a mortgage which includes an … Continue Reading
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
The Office of the Superintendent of Financial Institutions (OSFI), the federal financial institutions prudential regulator, recently addressed the issue of a cap on issuance of covered bonds which presently stands at 4% of a bank’s total assets. OSFI is now taking a hard look at this limit and is doing so in the context of … Continue Reading
