The update, put together by Christine Newell, Mortgage Technical Director at Paradigm, focuses particularly on how lenders are going to prepare for the Directive in terms of using either the KFI-plus or ESIS documentation, and what their key dates for all other MCD-related processes will be.
To help advisory firms track the range of announcements that lenders have been making in terms of their preparations, this latest version of the update also contains the MCD Lender Matrix. It includes details on lender documentation and system amendments such as the date they will be adopting the rules, the process for pipeline business, and anticipated criteria changes.
The Lender Matrix is an open document which will be updated each time a lender shares its changes with Paradigm. Advisory firms are urged to check the document regularly in order to keep abreast of those details.
This third update also provides further information around consumer buy-to-let advice and how lenders will begin to identify these transactions within their mortgage application systems. It also has links to two flowcharts covering both potential house purchase and remortgage consumer buy-to-let examples.
All Paradigm member firms are able to secure the MCD help and advice they need, as well as gain access to the forthcoming mortgage and protection events which will cover the MCD in detail via the Paradigm website.
The latest update is now available to view at Paradigm’s dedicated MCD page: http://www.paradigmmortgages.com/DA/News/mortgage-credit-directive.php
Bob Hunt, Chief Executive of Paradigm Mortgage Services, commented:
“There has been a noticeable increase in the information coming out of a variety of lenders in the past few weeks with regards to their MCD preparations. In particular we are starting to hear about the dates when they intend to adopt the new rules, the system developments that are taking place, and some key areas of note for advisers such as the use of either KFI-plus or ESIS documentation. In order to help advisers monitor these announcements we have updated our Lender Matrix document which can be found on our MCD website pages.
“On top of this our latest MCD Update document looks at the key area of consumer buy-to-let and provides pertinent information and access to examples where a client may fall into this new part of the regulatory framework. It is vitally important that advisers avail themselves of this information as carrying out consumer buy-to-let work requires both a variation of permission and ongoing, yearly authorisation.
“We would therefore urge all advisory firms who want up to date detail on the changes taking place over the next four months to visit our MCD pages – we also have an Action Plan document that firms can follow and a flowchart for the decisions required around the provision of second charge mortgage advice. This information will undoubtedly help with the planning and preparation of what will be another major change to the mortgage advice market environment.”