Smart Money has welcomed the FCA’s move to no longer require second charge lenders to obtain the interest rate on a client’s first charge mortgage.
The national second charge and bridging distributor believes that while the majority of the industry enthusiastically supports full integration into the main regulatory framework, there was always a danger that some of the positive features could be lost by unnecessary layers of bureaucracy.
Paul Crewe, managing director at Smart Money said: “The FCA has demonstrated that it is listening to concerns from within the industry. The extra time required to verify clients’ interest rates on their mortgages could have made the process laborious and unwieldly.
“While assessing affordability is a crucial area, by reviewing this part of the directive proposals, the FCA has provided clear guidance and forestalled an unnecessary brake on the speed with which applications can be approved. Also it can no longer become a potential means by which existing first charge lenders can ‘hold up’ clients in their desire to raise capital by not responding to requests quickly.
“The industry is moving positively to embrace the changes which will come into force in 2016. Personally, I think this move by the FCA only reinforces my belief that full integration will be a great success as it reinforces the view that second charge lending is now an important component in the lending community.”