The FCA is carrying out a review of second charge lenders to make sure they treat customers fairly and comply with MCOB regulations, Mortgage Strategy can reveal.
The FCA has not publicly announced the review. But lenders contacted by the regulator say it wants to assess how the market operates after it took over from the Office of Fair Trading last March.
An FCA spokesman says: “We can confirm that, as we often do following the introduction of new regulation, we are speaking to second charge firms to understand how they are complying with the affordability rules introduced as part of the Mortgage Credit Directive in March 2016.”
Mortgage Strategy understands the regulator is also interested in how often second charge lenders go outside their standard lending policy to make exceptions.
The regulator has contacted ten lenders as part of its review, including Shawbrook and Norton Finance.
Norton Group director Paul Stringer says: “The main areas they are looking at is ‘are firms complying with the rules and principles’. So are they complying with MCOB and the principles of Treating Customers Fairly. It was quite broad, in terms of what they were discussing.”
A Shawbrook spokeswoman confirmed the firm had been contacted as part of the review.
The FCA has paid visits to some of the lenders but has also called some in to its Canary Wharf headquarters.