View more on these topics

FCA: Firms are increasingly using transitional arrangements

Lenders are increasingly using the transitional arrangements written into the MMR to stop borrowers becoming trapped, says the FCA.

The transitional arrangements have been a hot topic of late and lenders have come under fire for their reluctance to use them.

They allow lenders to waive affordability checks for borrowers who may be trapped under the new rules as long as the customer does not wish to borrow more money, there is no “material impact” on affordability and they have a good payment history.

They can be applied to existing borrowers and borrowers from other lenders.

While many of the bigger lenders have been criticised for not using the arrangements as they were designed – especially with borrowers transferring from other lenders – smaller players like Ipswich and Melton Mowbray building societies have actively targeted these customers.

But speaking at the Intermediary Mortgage Lenders Association’s Great Mortgage Debate in London last week, FCA mortgage and mutual sector manager Lynda Blackwell said the situation was improving.

She said: “Firms are increasingly using the transitional arrangements. We are seeing that.”

However, mortgage prisoners were dealt a blow recently after it emerged that lenders would have to apply affordability checks to all remortgage customers who came from rivals as part of the European Mortgage Credit Directive, therefore making part of the arrangements redundant.

Recommended

Euro-flag-European-EU-700.jpg

FCA provides factsheets to help firms deal with MCD

Firms can from today choose to apply the new rules being brought in as part of the Mortgage Credit Directive – six months before they come into effect. To help with the transition, the regulator has produced a number of fact sheets for both brokers and lenders. They set out the changes brought about by […]

Andy Haldane
4

Bank of England raises prospect of rate cut

The Bank of England may need to cut interest rates in order to prop up UK growth, chief economist Andy Haldane has warned. In a speech to the Portadown Chamber of Commerce in Northern Ireland today, Haldane said the case for raising rates is “some way from being made”, before raising the prospect of a […]

Jonathan Samuels

Dragonfly CEO off to new venture

Dragonfly Property Finance chief executive Jonathan Samuels is to leave the bridging lender to set up a “new finance venture”. Head of sales and marketing Mark Posniak will replace Samuels. It is not known what area of financial services Samuels’ new firm will operate in but Dragonfly confirms it is not in real estate and […]

Legal-and-General-LG-700.png

L&G faces strike over closed office

Staff at Legal & General’s doomed Kingswood office have voted to go on strike following discussions between the Unite union and staff. The union opened a consultative ballot for industrial action, which closed last week. There was a 68 per cent turnout for the ballot with 63 per cent of the total membership voting for […]

Newsletter

News and expert analysis straight to your inbox

Sign up