Countdown to MMR
12 Feb 2014
What are you doing to prepare for the Mortgage Market Review in April this year?
We started by issuing briefings on MMR to our members last summer, then opened these up to the wider DA community via our website where we have built pages dedicated to MMR. These include guidance briefings, links to useful sites and information and other tools and templates, including a series of bulletins reflecting the interpretation of key areas such as execution only and disclosure.
Do you think the MMR will negatively impact mortgage lending in 2014?
No. I believe there will be a bulge as we lead up to 26 April, followed by a slight/modest down-turn as systems and procedures get embedded, then business picking up through the summer and beyond. For those larger banks with heavier direct retail distribution, we may well see dual pricing shift positively in favour of intermediaries, easing pressure as they bed in new sales processes and structures. In 2004 when MCOB rules first started the market took a little time adjusting to the new rules but with MMR I think things will settle down quite quickly as the market gets used to the new procedures.
Will the MMR result in more lenders going intermediary only?
I doubt that very much. However, I’m certain we will see more of lenders’ business being transacted by the intermediary channel, and not just in the run up or immediately through MMR.
How will MMR change the way mortgage brokers interact with lenders?
While it is not applicable to all, I think the value of intermediary business is perhaps only now becoming fully recognised at all levels within the banks. Lenders are having to consider the role of their BDMs and how they have interacted with brokers since the downturn in the market. Lender BDMs who have maintained good relationships with their brokers throughout will have a big advantage over others, who to some extent went missing. In that regard, MMR presents an opportunity for a fresh start and in some cases a lot of rebuilding work.
Will it become harder to get a mortgage through?
I don’t think MMR will make it any easier for an applicant but I don’t think it will make it any harder either.
For any brokers out there who have not started to prepare for MMR, would advice you give them?
If a firm has not started to prepare for MMR then there are clear choices. It’s not too late if you are committed to providing great advice - get onto our website ASAP or call Paradigm’s Christine Newell to get some practical help and advice on where to start. Alternatively, get rid of your mortgage permissions and find a professional firm who you can work with on a referral basis – i.e. ensuring you assist and retain existing clients who need your help.
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