Question: Lenders are making final changes and tweaking their systems to become MMR-compliant before the official start date of 26th April. As a broker firm, does this mean I can also begin ‘MMR trading’ before ‘MMR Day’?
The simple answer is yes and no. Certainly you’re going to need to mirror the lenders that are switching to MMR early – their requirements are obviously changing and they are not going to acceptapplications which do not have all the new MMR-related information/checks they need. As you will have seen many lenders are issuing cut-off points for when they will accept non-MMR applications and you need to ensure that you’re aware of those dates and what is required of you.
At our recent mortgage and protection roundtable, attended by the FCA, the regulator was encouraging firms to go as early as they can with their changes.
However, there are certain things you cannot do. For example, under the MMR rules there are no requirements to issue an IDD, but if you are planning to dispense with an IDD you can’t get rid of this until after the 26th April.
Some might suggest you don’t jettison the IDD at all as it is a sound way to disclose your proposition and the service the client can expect to receive. Of course this is also possible – the FCA will be issuing an IDD template but it won’t have the regulator stamp on it and remember, if you so wish, you can opt to construct your own documents that fit this purpose.
If you’re looking for a summary of changes to disclosure documentation then you can find this by visiting the Paradigm website and clicking on the ‘Mortgage Market Review’ button on the left of the screen. This will take you to a series of factsheets we have put together which provide a range of MMR-related practical support covering areas like execution-only, evidencing suitability, interest-only mortgages, factfind changes, file checks, and much more.
To summarise, you can go MMR early in some respects but make sure you’re not jumping the gun in others. If you’re uncertain, either check with the FCA or wait.
Visit the Paradigm website for its adviser-tailored MMR factsheets