The feedback and final policy on Arrears and Approved Persons in the Mortgage Market Review update provided by the Financial Services Authority recently said, “One TPA stated one-off costs for following this guidance of £1.6m for system development, implementation resource and reporting costs.”
If similar costs were incurred across the industry, the MMR would cost UK mortgage servicers almost £21m collectively, said Phoebus.
The mortgage servicing software company said at least five of the thirteen companies currently providing lenders with servicing support are compliant already, including CapQuest Group, Crown Mortgage Management, Exact, and Oakwood Global Finance.
But the combined cost of updating the remaining 8 servicers will be approximately £14.4 million, he said.
Paul Hunt, managing director of Phoebus Software said: “This means the MMR is going to have an even bigger impact on mortgage lenders than we realised. Collectively, unprepared servicers are going to need substantial development that will have to be paid for. Lenders will end up footing the bill – ultimately it’s customers who will suffer.”
