Navigating the Mortgage Credit Directive: From Perimeter to Customer Journey

Introduction

Not every regulated mortgage contract is subject to the Mortgage Credit Directive. This bitesize webinar explores how to identify when the MCD applies and what its application means in practice.

Beginning with the regulatory perimeter under FSMA and the Regulated Activities Order, the session distinguishes between regulated mortgage contracts, MCD regulated mortgage contracts and consumer buy-to-let arrangements. It then follows the mortgage customer journey, highlighting the key disclosure, affordability, sales, product and servicing requirements that firms must address.

What You Will Learn

This short webinar will cover the following:

• Understand the purpose of the Mortgage Credit Directive and how it has been implemented within the UK mortgage regulatory framework
• Explain the relationship between FSMA, the Regulated Activities Order, the Mortgage Credit Directive Order 2015 and the FCA’s MCOB rules
• Distinguish between a regulated mortgage contract and the narrower category of an MCD regulated mortgage contract
• Recognise that the MCD does not apply to every regulated mortgage contract and identify the principal MCD exemptions
• Understand the separate regulatory treatment of consumer buy-to-let lending and the importance of distinguishing consumer activity from business-purpose lending
• Apply a structured perimeter analysis by considering the borrower, the credit, the mortgage security, the use of the property and any applicable exclusions or exemptions
• Identify the principal MCD requirements across the mortgage customer journey, including creditworthiness assessments, pre-contract disclosure and the sales process
• Recognise the MCD rules relating to remuneration, tying practices, foreign-currency loans, variable interest rates and early repayment
• Identify common classification, documentation and compliance errors and understand when a matter should be escalated
• Apply the rules to practical examples, including mixed-use property, second-charge lending and potentially exempt mortgage products
• Understand the records and supporting evidence firms should retain to demonstrate a reasonable and defensible regulatory classification