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Stephen Smith: How’s life after the MMR?

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Everybody in the mortgage market is asking each other the same question at the moment and the refreshing news is, yes, there is life in the market after the Mortgage Market Review. 

How unlike the dark days and weeks that followed M-Day in 2004 – and indeed into the first quarter of 2005 when lending volumes plummeted and brokers and lenders alike were bedevilled with computer problems and a mismatch in understanding of the new regulations.

Lending volumes have continued in an upward trajectory, albeit with a slight slowing in the rate of growth, as noted by the Council of Mortgage Lenders in its June figures.  

If there has been any slowdown in lending, it has come from the branch and direct operations of the lenders themselves, where there continue to be long delays for consumers in getting mortgage interviews.  

Perhaps this is not surprising given the scale of change required from lenders to comply with the MMR compared with the intermediated market.

We are still not back to business as usual, however, and most brokers would say the speed of cases going through has slowed. Time from application to offer ranges from 10 to 23 days, according to our data, with an average of around 15 days. 

Over time, this situation will surely improve as lenders get to grips with new systems and procedures and perhaps iron out some of the wrinkles that appeared in new lending criteria resulting from the MMR.  

But for anyone with a recollection of how M-Day and the following weeks unfolded, the post-MMR period must be regarded as a terrific success. All sides of the industry deserve a pat on the back.

Looking ahead, the FCA will embark on an inspection tour later in the year as it undertakes its MMR thematic review. We hope it approaches this with an attitude of not looking for things to change or fix unless with good reason.  

Our industry sector has been undergoing regulatory change for about the past five years so a period of quiet from the regulatory quarter would be appreciated.  

Let us spend a while just doing business and helping people find the right mortgage while letting regulatory change slip down our risk profiles – for a few months at least.

Stephen Smith is director of Legal & General Mortgage Club

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