The delay to releasing the data is preventing lenders launching products which could help thousands of borrowers trapped outside regulatory protections who could possibly be supported by amended affordability rules introduced this week.
It is expected that it could take lenders as much as six months to start using the modified affordability assessment rules.
Mortgage Solutions also understands that the regulator has plans in place to monitor how many of these mortgage prisoners are able to switch away from their lenders.
Both these points were key issues raised by industry representatives when the FCA implemented its amended affordability assessment rules this week.
Borrower data critical
Building Societies Association (BSA) head of mortgage policy Paul Broadhead told Mortgage Solutions that until that data is received “it’s still quite difficult for lenders to determine their appetites” to these borrowers.
UK Finance director of mortgages Jackie Bennett added: “We look forward to the FCA publishing up-to-date information on borrowers with inactive firms, allowing the industry to develop products that meet these customers’ needs where individual active lenders have the commercial and risk appetite to do so.
The FCA is working with lenders and other industry representatives through an implementation group and insights from the data will be shared through this group.
Lenders using the modified affordability assessment may do so for any remortgaging customer that meets the eligibility requirements, not just those who are considered trapped with their existing lender, and must report how many times this is done.
The BSA’s Broadhead noted that, although this was a sensible decision, it would be harder for the FCA to account for how many mortgage prisoners have actually been helped.
However, Mortgage Solutions understands that the regulator intends to separately review the extent borrowers trapped with inactive and unregulated lenders have switched to a more affordable mortgage based on the modified assessment.
And this assessment should also help the FCA estimate how many of these consumers may have been unable to switch as their circumstances have put them outside lenders’ risk appetites.
It was also revealed this week that another undisclosed number of mortgages have been sold by UKAR to an inactive lender, Helidor Mortgages, which has prompted the UK Mortgage Prisoners support group to seek legal support for their situation.