The Treasury consultation paper out today designed to align UK mortgage rules more closely with Europe, proposes to regulate arranging a mortgage for a property abroad, where it is unregulated presently, said the Treasury.
The Treasury adds it does not expect this to have a significant impact on UK firms, as it states it is relatively rare for a UK lender to provide mortgages on properties located outside the UK.
However, the government is also proposing to add further detail to the definition of the activity of ‘arranging regulated mortgage contracts’.
The detail suggests the paper could also draw previously unregulated introducers under MMR into the new aligned regulatory umbrella, even if they refer clients to a regulated adviser.
Also, any individuals undertaking mortgage-related activities without receiving remuneration, in the course of acting as a trustee or personal representative may also need to be regulated.
Equally, any person carrying out mortgage-related activities in the course of a profession or non-investment business, where these activities are incidental to the course of the professional activity may come under FCA supervision post 2016.
Equitable mortgages – or mortgages secured legally but without title deeds – and offered by just two providers but are also likely to become regulated under the new regime.
Timeshare arrangements, which are currently unregulated and generally financed by unsecured lending, are likely to be gathered into the new FCA regime, said the Treasury.
And finally, any mortgage lending undertaken by the government (including local government and housing authorities) is exempt from the scope of FCA regulation, but this is another area under scrutiny in the consultation paper.
