27 Apr 2016
The FCA has allowed lifetime mortgage lenders to waiver rules that will allow them to "switch off" affordability assessment for customers offering interest-charging lifetime mortgages that can convert to roll-up mortgages.
The FCA has said: “We have decided to make this modification available because we do not consider that an affordability assessment is required where there is no risk of arrears and repossession in the event of missed payments."
The modification works by dis-applying the requirement to carry out an affordability assessment where interest payments are anticipated or required, providing that the specific lifetime mortgage allows the consumer to exercise at any time an option to convert the product to interest roll-up. The modification applies to lifetime mortgage providers and intermediaries. Intermediaries can rely on the provider’s modification when arranging or advising on that provider’s lifetime mortgages.
Paul Smee, CML director general, said: "This may look like a small change, but it is a really significant one that should allow the lifetime mortgage market to develop in a far more sensible and consumer-friendly way. It removes one barrier to the provision of sensible, safe and worthwhile lifetime mortgage products."
Find out more: Mortgage Finance Gazette
The FCA has released a consultation paper on their regulated fees and levies proposals for 2016/17.
All fee-payers will be affected by the consultation paper. Although it does not contain material directly relevant to retail financial services consumers or consumers groups, fees will indirectly be met by financial services consumers.
Responses are required by 27th May 2016 by using the online response form at: http://www.fca.org.uk/news/cp16-9-fees-levies-2016-17
As the stamp duty surcharge kicks in for buy-to-let purchases in England and Wales, the Prudential Regulation Authority have proposed that affordability tests are introduced to implement minimum standards for lenders who are under-writing buy-to-let mortgage contracts.
The proposals seek to ensure that firms conduct their buy-to-let business in a prudent manner. They aim to prevent a marked loosening in buy-to-let underwriting standards and to curtail inappropriate lending and the potential for excessive credit losses.
The consultation paper proposes:
Find out more: Bank Of England
The FCA has published their second consultation paper of 2016, proposing minor changes to the FCA handbook.
The proposed changes include:
Find out more: Quarterly Consultation Paper No. 12
The FCA published their business plan for 2016/17 on the 5th April 2016.
Their priorities for the coming year will be: