Following a successful pilot event, bridging lender West One Loans is to hold a series of broker workshops for intermediaries explaining the implications of the EU Mortgage Credit Directive ahead of its implementation on March 21st.
The initial breakfast session was held in mid-January at Balthazar, in London’s Covent Garden. An audience of 20 brokers were given a detailed breakdown of the background of the legislation, the key changes to regulated mortgage contracts, updates on exclusions and scenarios of loans that would previously have been unregulated which will now come under the Financial Conduct Authority’s remit.
West One Loans say adviser reaction to the January event was so positive that they will host more sessions to help brokers get to grips with how the regulatory changes will impact their businesses.
Second charge mortgages will move from the Consumer Credit Act to the mortgage conduct regime in March, but there are also implications for second charge bridging loans and certain types of buy-to-let lending.
Key Facts Illustrations (KFI) will also be replaced by a European Standardised Information Sheet (ESIS) (or a top-up KFI) until March 2019 and all staff involved in the manufacture of mortgages or granting credit will need to demonstrate knowledge and competency by March 2017.
The next session to be held in mid-March, prior to the MCD implementation date of March 21st.
Duncan Kreeger, Managing Director of West One Loans, said: “The MCD implementation date is now less than two months away, so intermediaries can no longer afford to bury their heads in the sand when it comes to such an important piece of regulation that is going to effect their daily interactions with clients and lenders. We’ve fielded a steady stream of queries from brokers since the final rules were published last March, which has grown in volume as the deadline edges closer.
“Happy as we are to help brokers with these individual requests, we thought it would also prove useful to hold a session where intermediaries can hear from our compliance team in person about the implications of MCD and in particular how they submit cases given the new paperwork required and new measures such as the reflection period. This is why we held the January pilot event."
Jackie Steel, Group Compliance Officer of West One Loans, said: “One important message to communicate to brokers is that we are taking early actions to ensure our customer journey is not interrupted by the lack of a transitional period within MCD. Any regulated mortgage contracts which are entered into from the 21st March 2016 onwards will have to be underwritten under MCD regulations. This is one of the reasons why we are commencing MCD lending from February 15th, to ensure our brokers have more time to come to terms with the changes and to prevent the need for cases to be restarted under the MCD rules.
“We’ve always fully embraced regulation, as anything that puts the customer’s best interests at heart can ultimately only benefit the entire industry in terms of transparency and perception. As a leading specialist lender, we will do everything we can to help brokers embrace the new era with confidence rather than fear.”
Sam Lee, Senior Mortgage & Protection Adviser at Capricorn Financial Consultancy, said: “As with any new legislation it will only be once the new regime has started that the new processes and systems will fall into place, but it is important to be as prepared as possible and events like this help with comprehension and understanding. West One has always been an approachable lender that takes its educational responsibility seriously and has always been on hand to answer questions about regulation. Placing a case with a lender isn’t just about headline rates, but also about the level of service you are likely to receive and how well the underwriting team understand the complexities of what the client requires. With West One this is never an issue and, given the forensic preparation they have undertaken in readiness for the regulatory regime, won’t be a problem post-March.”
Brokers wanting to attend the next event should contact Francesca Kindrat on email@example.com to register their interest.