Specialist finance broker The Loans Engine has welcomed the introduction of the Mortgage Credit Directive heralding it as a ‘great leveller’ for the entire mortgage market.
The MCD has come into force today and introduces an EU-wide framework of conduct rules for mortgage firms. It applies equally to both first and second-charge mortgages and moves the regulation of the latter under the auspices of the FCA’s mortgage regime.
It means that any lender, administrator or broker carrying out second-charge mortgage business now has to be authorised and hold the correct mortgage permissions.
Ryan McGrath, chief executive of The Loans Engine, said: “The MCD has been a long time in the making but it is now a fully fledged part of UK financial services law, and we at The Loans Engine wholeheartedly welcome a directive which is a great leveller particularly between the first and second-charge mortgage markets. For too long, the potential of second-charge mortgages to provide the right solution for capital-raising clients has often been overlooked, but now with these new rules, clients will be made fully aware of the alternatives to a remortgage and will be provided with up-to-date information to make a fair comparison.
“We have already begun working with many mortgage networks and advisory practices that have recognised their need to work with a specialist master broker in this area. A significant amount of work has gone into securing the necessary authorisation, beefing up our technology platform, and ensuring we are ready today to begin dealing with the introductions, quote requests, and packaging needs.
“Today is a ground-breaking and monumental day for the second-charge market as this is finally the level playing field the sector wanted and needed. We are looking forward to forging ahead in this new environment and would urge any adviser or network that is looking for support in this area to get in contact with us as soon as possible.”
The Loans Engine was one of the first second charge specialist finance brokers to receive formal confirmation from the FCA that its application for the permissions necessary to continue broking second charge mortgages under the MCD had been approved.