The Mortgage Credit Directive (MCD) is a set of regulations which will set a European-wide standard for the mortgage market. The lender said it plans to implement its changes ahead of the European 21 March deadline.
Nationwide’s intermediary websites NFI Online and TMW Online have launched EU MCD dedicated web pages. The pages will detail the changes affecting each brand and release updates.
Brokers are invited to submit questions, which Nationwide will add to its Frequently Asked Questions section.
It is opting to use an updated version of the Key Facts Illustration (KFI) called KFI+, which will include additional MCD information within the relevant sections.
The MCD requires lenders to provide the customer with a binding offer and a reflection period. The reflection period will last for nine days, and a customer can choose to waive the period either through Nationwide or their solicitor.
A new KFI will not be produced for Pipeline cases, which have been submitted but not offered. For applications submitted before the MCD deadline but offered afterwards, additional information will be included with the mortgage offer.
Nationwide will be accepting consumer buy-to-let applications across the standard TMW product range for intermediaries signed up to the Financial Conduct Authority’s (FCA) new Consumer Buy to Let register. The register allows brokers to advise on regulated mortgage contracts.
Consumer buy-to-let borrowers will be identified through additional questions on the mortgage application form. Those unaffected will be asked to sign a declaration that they understand they are not being regulated as consumer borrowers.
Ian Andrew, managing director of group intermediary sales at Nationwide, said: “We are outlining our approach to the changes ahead of the introduction of the MCD regulations, to support intermediaries in their planning and preparation of the new rules.
“In terms of the process, brokers should not experience significant impact, particularly given that many of the changes needed have either been introduced at an earlier stage, such as revisions made in advance of the Mortgage Market Review rules, or are technical measures that have no impact on the application process or decision to lend,” he said.
The Mortgage Market Review was launched by the Financial Conduct Authority to see how the mortgage market could be improved. In mid-2014 it introduced new rules to make sure a borrower can afford repayments now and in the future.
Under those rules, a lender must consider a borrower’s income, outgoings and the impact of a potential Base Rate Rise on the ability to make repayments.
Andrew added that Nationwide and TMW will give support through BDMs, online and telephone, as well as the new Broker Chat facility.
There will be no material changes to Nationwide’s existing lending policy.
