Will it produce the desired outcome â a more sustainable mortgage market for all participants in future, or could it fail consumers, diminish an already flat market and drive lender costs upwards by a combination of intentional and unintentional consequences?
The key issues for many lenders will be around process and technology requirements to support the proposed changes.
Changes to the sales process including where and when KFI is produced will be relatively straightforward for modern workflow and parameterised systems, but could be complex and costly for older less flexible systems.
Likewise, newer platforms have abstracted affordability and income rules to decision engines that can be managed by business rather than IT users. In recent developments, lenders have integrated scan and attach at point of sale to accelerate the manual income verification process. Additionally, the availability of a fully integrated on-line income verification service through HMRC and other third parties should enable lenders to continue to provide high levels of customer service and issue unconditional offers at point of sale.
And just when lenders start to invest in MMR, the proposed EU Directive cloud will appear. The EU vote has been delayed until January 2012 and has over 1,000 amendments tabled. Although there has been some sign of stepping back to a generic framework, there are concerns that the proposals are moving away from a principles-based approach towards a âone size fits allâ direction which would hamper the UK mortgage market.
Simon Badley, Avelo Commercial Director added: âThe next two years will provide lenders, their product and IT managers with a number of challenges; the winners being those who can adapt, innovate and transform their systems and business to meet and surpass the challenge.â