Loan Introducer talks to Richard Pike, sales and marketing director, Phoebus Software Ltd.
How will the MCD impact the market in terms of technology?
The technological changes required for MCD will affect both the lenders and intermediaries. From a sales perspective, there is the requirement to ensure a compliant ESIS or KFI+ is issued on regulated business. There is also the requirement of the new APRC, which replaces the traditional APR on regulated business. Lenders that offer both regulated and unregulated products may want to show an APR or APRC depending on the product selected. This could cause some headaches.
The other major change will be for secured loan lenders who now have to follow a much more MCOB style process. For lenders who only do second charges they will need to make significant changes to processes within systems and it could turn out to be more cost effective for some to change platform.
How do you think lenders can help brokers to get to grips with secured loans?
History dictates that intermediaries originate the majority of secured loans and therefore they will keep abreast of the requirements of MCD by way of the already close relationships they have with their lender panels. As with first charge lenders, I expect all secured loans lenders are already notifying their intermediaries of their approach to MCD, the changes in process and policy and how the changes will affect systems, process, etc.
Mortgage brokers will need to ensure they document their sales process effectively in order to comply with regulation and avoid complaints, how important is technology in this?
Technology is essential in providing an audit trail and should also work as a facilitator to the regulatory sale. Technology is also useful in streamlining the process, making sure brokers go through the required steps in a certain order so that they gather all the information they need from the client in the right way. This can be done manually, but there is a lot more room for error and therefore potential non-compliance if you do.
What is the biggest challenge facing the mortgage market – first and second charge – at the moment?
People are still getting to grips with the MMR and now they have the MCD to deal with. Lenders’ challenges are keeping up with all of the developments, ensuring that they are compliant and that they have the right systems in place to be able to report all of the required MI back to the FCA when they want it and in the format they want it.
The challenge for brokers is keeping abreast of what the lenders are doing, especially as it increasingly possible that every lender will have a different approach.
It sounds like there will be no transition period come March and this is bound to catch out one or two people who may well find that they cannot conduct business for a period.
How has business been for Phoebus this year?
2015 has been a great year for us, and in our 26th year of trading, has the potential to be a record year for us.
A highlight for the Board was that we were included in the 2015 Times Top 100 companies to work for.
What’s next for Phoebus?
There will be further development of our originations platform to accommodate all of the product types that the Phoebus solution supports across lending and deposits.
We have achieved a first Phoebus deployment in Ireland and we expect further expansion into this geographical sector, which could also be a launch-pad into other European territories.