< p>Whilst there are many and varied companies labouring under the onset of new regulation through Consumer Credit, the mortgage sector, which has only recently adapted to the Mortgage Market Review, is set for a second round of regulation which comes into force on 21st March 2016, under the European Mortgage Credit Directive (MCD). This, as  its title implies, is a regulation that affects all countries in the EU and is something  which the Financial Conduct Authority (FCA) will have to adapt its own processes to in order to ensure that it falls in line with expectations. This in turn means that you will be required to look at yours and, in many cases, you may have to apply to change your current permissions and also accommodate those for consumer credit, if you haven’t held them previously.

This is set to have a significant impact on those firms offering secondary lending options for their clients, and change will almost certainly affect professionals in the bridging finance sector, particularly as the second charge mortgage market is growing year on year. With rates sometimes lower than 5% and an increasing flexibility around criteria, it’s clear why the second charge mortgage sector shows no sign of slowing down and is a valuable and highly relevant tool in an adviser’s kit.

In addition to changing classification surrounding buy-to-let mortgages in particular, there are also likely to be changes needed to your mortgage advice process, to ensure you stay compliant. At first glance, the process looks fairly straightforward- just four simple steps:

•    Advising and selling standards
•    Responsible lending
•    Pre-app disclosure
•    Training and competence

However, those of you who are  familiar with the way in which the FCA operates will not be surprised to hear that this is a veritable Russian doll of regulation, with many  additional layers of guidance lying beneath those four bullet points.  

If you would like to get your knowledge and understanding of the changing regulation up to speed, book your place now on our bespoke webinar ‘Regulation of Regulated Mortgage Contracts; an examination of the Mortgage Credit Directive’s impact on brokers’ business’. Register to attend by clicking here

The MCD is likely to require some significant adjustments in business operations for the majority of bridging finance firms. In order to help you understand these changes, and determine how to practically build them into your processes, the SimplyBiz Group, is hosting a webinar for AOBP Members on Monday the 21st of September at 10am. To book your place, please click here . The online event, hosted by SimplyBiz Group Head of Compliance Policy, Richard Nuttall, will cover all areas of the MCD, from the background of the regulation right through to how to meet your training and competence requirements.

If you have any questions on the information in this article, or any other area of regulation or compliance support, please don’t hesitate to get in touch with the Consumer Credit Centre team on 01484 443424.

David Golder

Client Proposition Director