Posted: 7th August 2013

With the Mortgage Market Review (MMR) rules due to come into force in less than a year, firms’ implementation planning should be well underway for April 2014. As expected, the regulator is taking a deep interest in how firms are approaching the implementation activity. In May this year the regulator issued its first survey to track industry progress. In order to test what these implementation plans are made of, the FCA will visit the largest lenders, intermediaries and some specialist lenders.

The regulator highlights the importance of firms’ preparation in altering part IV permissions to allow lenders and intermediaries to sell mortgages in the post MMR world. The move to selling mortgages on an advised basis will prove, for some firms, to be a significant change in business model and increases the inherent conduct risk in mortgage sales.



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The FCA is prescriptive in its expectations of firms making applications to vary their permissions. Firms should:

Outline training and competence arrangements to ensure advisers are appropriately qualified
Outline the supervisory arrangements that will apply for the selling of mortgages. This includes the spans of control and the timeline for mortgage advisers to attain qualifications. Remember: MMR requires that mortgage sellers should attain an appropriate qualification within 30 months of commencing mortgage advice
Internally, ensure you have appropriate monitoring arrangements for the selling of advised mortgages

The challenge in preparation and implementation is not simply creating these processes and controls; it is building them with good customer outcomes and customer experience in mind.

Consider this: what is it worth to your firm to build your future mortgage business on the best foundations: highly skilled and well trained people, effective control systems and processes with the best customer outcomes?


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