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MCD changes like Arsenal’s attitude to transfer window for mortgage brokers – One Savings Bank

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  • 29/09/2015
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MCD changes like Arsenal’s attitude to transfer window for mortgage brokers – One Savings Bank
Higher compliance costs and falling fees will drive huge change through the second-charge advice sector, said One Savings Banks’ John Eastgate this morning.

However, he admitted most of the changes for mainstream brokers are less interesting, much like Arsenal manager Arsene Wenger’s relationship with the transfer window.

“He’s very aware of it but it’s for other people to spend some time on it,” said Eastgate.

Speaking to an audience of over 100 brokers at the Complete FS Specialist Lending Expo near Southampton, Eastgate said the Mortgage Credit Directive (MCD) would usher in higher conduct of business standards for second-charge advisers than ever before.

He said the burden to produce ever-higher consumer outcomes will also bring higher compliance costs to advice firms.

“The reality is compliance professionals are in such demand and they cost a lot of money,” he added. “What was good enough before won’t be good enough now.”

He warned brokers to also expect falling advice fees in the second-charge market as the market adjusts to the additional volumes brought in by first-charge brokers, offering the products alongside remortgages after 21 March next year.

Second-charge arrears levels have already fallen from 18% in January 2011 to 14% in July 2015, he said, which needs to go further.

“Everyone would accept lower arrears levels are a good thing. Giving people loans they can’t afford to repay is not a good situation.”

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