The FCA is asking for advisers who have whole of market access and are able to advise on or refer to later life options and debt consolidation to apply to be on its list.
UK Finance asked the regulator to co-ordinate a list of brokers to work specifically with mortgage prisoners, and the FCA is now curating this group.
No pre-app fees
Advisers and secondary intermediaries must not charge a fee before an application is submitted and they will need to share relevant data with the regulator.
When referring for later life or debt consolidation options, secondary advisers must have access to options that represent the whole of the relevant markets.
The list will allow lenders to see which advisers need to be updated with any changes which could benefit mortgage prisoners. However borrowers will also be able to approach advisers who are not listed.
The regulator’s research in January estimated that of the 250,000 borrowers with mortgages in closed books or held by unregulated entities, 170,000 would be able to switch mortgages following changes to affordability assessment.
However, only 14,000 of those were expected to be able to make a meaningful saving by moving onto a new rate.
Mortgage administrators are required to contact mortgage prisoners who are eligible to switch by 1 December 2020.
Possible options available to mortgage prisoners include products which have the modified affordability assessment, debt consolidation and existing deals with relaxed criteria.
For older interest-only borrowers, alternatives include equity release, retirement interest-only and mortgages into later life.
Interest-only remortgaging with a repayment strategy including sale of the property, part capital, part interest-only or repayment mortgages for interest-only customers are also possible switching options.
To help monitor outcomes for mortgage prisoners, the FCA is asking participating advisers to collect data on the number of inbound calls from borrowers who have received information on the changes to affordability assessment and the number of cases where a fact find is completed.
Advisers must also record how many applications are sent to lenders on behalf of mortgage prisoners as well as the number of applications which are completed.
Information on how many mortgage prisoners were signposted onto other solutions such as debt advice must also be noted.
Directly authorised firms and the authorised principal firms of appointed representative (AR) networks can apply for the scheme.