The FCA has today published answers to brokers’ most frequently asked questions on the Mortgage Market Review.
The MMR comes into force in April shaking up lender affordability and income verification rules as well as introducing fully advised mortgage sales.
The FCA answers, published on its website, are based on a summary of the popular topics discussed during last year’s MMR roadshows with brokers.
The regulator divides the key MMR topics for brokers into advice, execution-only sales and disclosure rules.
The FCA says it will shortly be publishing a webcast on intermediary issues.
Key broker MMR Questions
How should we approach rolling up fees into a mortgage?
Each customer’s circumstance should be assessed on their own merits and your advice will depend purely on what is appropriate for that particular customer.
Do we need RDR-style CPD training?
No RDR training is needed but staff are expected to be appropriately qualified and to regularly review their competence.
If the customer does not take the offer I recommend but I do not offer execution-only sales, can I proceed with the sale if they sign a suitability letter and disclaimer?
No. Where a customer has rejected your advice (in whole or part) and you have made a commercial decision to not undertake execution-only business then you do not have to proceed with the sale.
What happens to my advice if changes need to be made after the application?
It depends if it has an impact on the advice given. For example if the customer was advised to have a 25-year term but when the case is underwritten they can only have a 20-year term then a further discussion will need to asses customer needs.
Will the Key Facts Illustration change?
There are no changes to the Key Facts Illustration and brokers only need to provide one KFI even if they charge fees.
Do I need to set out how much execution-only business I do?
Yes. Firms must set out how much execution-only business they expect to do but do not have to offer it.
What is the FCA view of independent of whole of market labels?
It does not require the use of labels such as ‘independent’ and ‘whole of market.’ Brokers must explain the limitations of their service, such as; “I only offer mortgages from a number/panel of lenders. I can provide you with a list of these”.