The update focuses particularly on how lenders are preparing for the directive in terms of using either the Key Facts Illustration-plus (KFI-plus) or the European Standardised Information Sheet (ESIS) to be known in the UK as the Mortgage Illustration. The matrix will set out lenders’ key dates for all other MCD-related processes to go live.
The MCD comes into force on 21 March 2016 and introduces an EU-wide framework of conduct rules for mortgage firms. It aims to insure a consistent approach between the EU’s mortgage industries.
To help advice firms track the range of announcements that lenders have been making about their preparations including the process for pipeline business and anticipated criteria changes, the latest version of the update contains the MCD Lender Matrix.
The Lender Matrix is an open document which will be updated each time a lender shares its changes with Paradigm.
The update also provides information around consumer buy-to-let advice and how lenders will begin to identify these transactions within their mortgage application systems. It provides links to flowcharts covering both potential house purchase and re-mortgage consumer buy-to-let examples.
Bob Hunt (pictured), chief executive of Paradigm Mortgage Services, said it was ‘vitally important’ that advisers took advantage of the information as carrying out consumer buy-to-let work required both a variation of permission and ongoing, yearly authorisation.
Apart from giving ‘pertinent information’, he said the update allowed access to examples where a client may fall into the new part of the regulatory framework.
Paradigm also provides an action plan document that firms can follow and a flowchart for the decisions required around the provision of second-charge mortgage advice.
“This information will undoubtedly help with the planning and preparation of what will be another major change to the mortgage advice market environment,” Hunt said.