Cheryl B&W

Cheryl Hughes, Compliance Officer Team Leader

Mortgage Credit Directive (MCD)  has now arrived and effective from 21 March 2016 and below is a brief summary of  MCD and the Key changes:-

What is MCD?
The European Union Mortgage Credit Directive (MCD) came into force with the aim of having a single, EU-wide framework of conduct rules for mortgage  firms.
This will ultimately ensure a consistent ‘high’ level of consumer protection throughout all EU Nations.

KFI+ or ESIS
These now replace the `KFI` (Lenders will choose whether to issue KFI+ or ESIS)

Binding Offers and Reflection Periods
All Offers will be binding by Lenders at the point of issue. Clients will have a 7 calendar day reflection period from receipt. To allow for posting, most Lenders will work on a 10 calendar day reflection period from the date of the offer. Clients will be able to waive the reflection period and proceed within the 7 day period if they wish.

Consumer Buy To Lets
Please ensure you check all Lenders criteria for the definition of Consumer Buy to Let (CBTL) and whether your application falls into this category.

Action To Be Taken

  • When advising on residential mortgages firms will need to consider both first and second charge(Where relevant)  mortgages to be without limitation. Other options may include – further advance with existing lender / personal unsecured loan.
  • All recommendations should be confirmed in writing for consistency on ALL mortgage types. Construct your Suitability Letter and use the template available from The Key and please adapt these to reflect the individual circumstances of the client.

Sourcing Tools
We are aware that the ` sourcing` tools are not all active at present, (please see below *)  however, in the interim period until all sourcing tools are in place can you please include in your Fact find all your research and fully document your recommendation taking all options into account in your suitability letter.

Learn how to Source a Second Charge Loan in 10 minutes* – Free Webinar
Mortgage Brain have made essential changes to their sourcing systems and launched a new Second Charge Loan solution, LoansBrain, to support you under the new legislation.
Mortgage brain are offering Free Webinars for the sourcing of Second Charges (LoansBrain) which you can register for here.

Polite Reminders

  • For those Advisers who have not attended a MCD Event or completed their MCD Training on our Adviser Training Site please see http://rightmortgageadviser.com/mcd-training/. Well done to the 42 Advisers that have now completed the MCD Training online and for those who have not completed the MCD please remember to complete this no later than Monday 4 April 2016
  • Please remember to register your interest for the forthcoming National Training Event – National Training Conference: 11th May 2016 National Motorcycle Museum, Birmingham. Register Here.
  • Please remember to use the adviser site where you will find lots of useful information on all our updates/ processes and documents.

Need to get in touch?
If you have any questions about these changes, please contact your Compliance Manager  or email compliance@therightmortgage.co.uk