A master broker has claimed that mortgage brokers need more clarification from the Financial Conduct Authority (FCA) after it appeared they may no longer need to apply for additional permissions to offer second charge loans.
Promise Solutions said that in a document issued shortly before Christmas the regulator said: “Firms with first charge mortgage permissions and doing 2C business in the same legal entity will not need to apply for additional permissions as the existing mortgage definitions will be extended to include second charge.
“But, for firms registered for consumer credit interim permission and whose only consumer credit business related to second charge business should email application.period@fca.org.uk to request to move their application period to March 2016 to avoid having to make a consumer credit application. This way firms will keep interim permission until the MCD and legislation comes into force.”
Steve Walker, managing director of Promise Solutions said that while this may seem like good news for brokers it leaves some questions unanswered and brokers could easily misinterpret such a brief but significant announcement.
“We have received numerous calls from mortgage brokers who were unaware of these options and have already engaged external consultants to help them apply for permissions which they no longer appear to need,” he said.
“Whilst some have complained about the wasted time and money, others have asked for more clarity or case studies to help them interpret the limited information they have received so far.”
Walker believes there is still a lot of details that need clarifying, particularly surrounding unregulated buy to let mortgages which brokers may still need credit permissions for.
He said: “We can’t offer any detailed guidance around this but it is important brokers get it right to ensure their permissions are as they want for the future – many got caught out by not having the correct interim permissions last April. Some further detail from the FCA would be helpful but, if in doubt we recommend brokers take professional advice or speak to their trade association. For ARs it is likely to be a simple case of listening to your network.”