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Do you expect to see less or more second charge mortgage lenders in 2018?

MCD: ‘Fears have largely been put to bed’

By Jon Sturgess, Head of Sales for Secured Lending at Masthaven |

 As we enter the brave new world of Mortgage Credit Directive (MCD) guidelines and systems.

As we enter the brave new world of Mortgage Credit Directive (MCD) guidelines and systems, It’s inevitable that different components within the second charge sector are finding their own ways of adapting to their new surroundings and shifting regulatory boundaries. 

It was clear from speaking to the intermediary market that a number of large brokers were running late in changing to MCD ready systems. This was one of the main reasons why we took the decision to wait longer than many other providers in moving to an all encompassing MCD ready process. During the switchover period, this offered brokers that little bit more breathing space to complete Consumer Credit Act regulated deals, an element we know was appreciated within some corners of the market. Not that the vast majority of the lending sector wasn’t prepared for the change - and it should be highlighted that such cases were certainly the exception and not the rule.
MCD preparations have been in place for a decent chunk of time, but moving into any new period of regulation inevitably gives way to a certain degree of apprehension. Many of these concerns revolved around how some positive features of the second charge marketplace could be lost by unnecessary layers of bureaucracy, not to mention some anxiety over a potential fall in business volumes.
Thankfully, such fears have largely been put to bed with providers doing all they can to ensure that it remains business as usual where possible. Integral to this is keeping all lines of communication and support open to brokers and their clients throughout this transitional period. As important is remaining upbeat about the vast potential on offer and the growing number of opportunities which will present themselves to brokers operating in and around this marketplace. 
Let’s remember that the closer alignment of second charge mortgages with first charge deals should result in a rise in prominence and profile for this sector. It should also provide more brokers with the ability to seamlessly integrate second charge business into their sales processes and therefore open the door to a valuable revenue stream for those who may have previously ignored it. While there may be a very slight hiatus in business during the changing of the guard itself, this additional regulatory emphasis will help provide the platform for the second charge marketplace to power ahead in the latter part of 2016 and beyond. 
Attributed to Jon Sturgess, Head of Sales, Secured Lending, at Masthaven Secured Loans

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