Mortgage Intermediaries
The role of a mortgage intermediary
Mortgage intermediaries play a crucial role in the lending process
The mortgage intermediary provides the following services:
✓ Identifies the most appropriate lender for the borrower
✓ Guides the borrower through the mortgage transaction
✓ Chases up missing information to enable the transaction to go through.
This can range from speaking to estate agents about timescales to solicitors missing required forms.
Following the implementation of the protocol, mortgage intermediaries will have the opportunity to collaborate with other stakeholders to ensure an efficient customer journey without any duplicated actions from the customer.
Rules and Regulations
The following rules and regulations apply to mortgage intermediaries
In the UK, Mortgage Intermediaries need to abide by the Financial Conduct Authority (FCA) code of conduct.
The Consumer Protection from Unfair Trading Regulations 2008 (Consumer Protection Regulations, CPR) identifies what information should be revealed to the borrower during the process.
They must adhere to the Money Laundering Regulations 2017 and be aware of the Proceeds of Crime Act 2002, which is the main money laundering legislation covering offences in the UK.
Material Information
Material Information (MI) means the information relevant to the property which would impact the average consumer’s ability to make an informed transactional decision.
This covers the legal and physical aspects of the property, along with the affordability of the financial aspects.
This will include things like:
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The size of the property
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Any restrictions on the property
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The tenure of the property (leasehold, freehold, commonhold)
Benefits
There are many benefits for mortgage intermediaries when sharing data in the early stages and throughout the buying and selling process, these include:
Greater transparency
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Borrower information allows Mortgage Intermediaries to identify borrower’s affordability and obtain a mortgage in principle, so the borrower only looks at affordable properties and prevents time wasting.
Faster certainty
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Relevant Material Information can be used to recommend the right lender.
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Incorporating digital survey data and Material Information into the valuation will reduce post valuation queries.
Better outcomes
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Greater protection against fraud and money laundering. Less waste on declined applications and transactions falling through.
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Improved understanding of the process and products.
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Resources are freed up to provide better customer service.
What data does a mortgage intermediary need?
A mortgage intermediary would benefit from a range of data to support their service, including:
• Anti Money Laundering verification
• Any outstanding credit and debt
• Bank statements
• Borrower credit score and credit references
• Borrower ID and necessary VISA
• Council tax
• Employment and self-employment details
• Energy Performance Certificate (EPC)
• Evidence of income
• Full property portfolio for Buy to Let transaction
• Property Type
• Tenure
Data sources
A Mortgage Intermediary can obtain data from a variety of sources, including:
Asking the borrower for the data
Verifying* the Material Information in existing Property Logbook
Gathering information direct from relevant authority
Receiving verified* Material Information and borrower data, either directly or shared by others in the process
*Authenticating the origin of the data, allows the conveyancing lawyer to establish whether the information is verified by the relevant data authority.
Sharing data
The increased sharing of digital data will have many positive impacts, including:
Digital ID certificates will speed up the verification under Anti-Money Laundering requirements for estate agents, conveyancing lawyer, mortgage intermediaries and lenders
The data in the property description, searches, title and seller information is also used by estate agents, surveyors, valuers, mortgage intermediaries, lenders and domestic energy assessors to provide their services
Process flow to Exchange of Contracts
Below are the key stages and activities in a property transactions related to the mortgage intermediaries:
Decision in Principle
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Borrower ID
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VISA
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Income
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Credit reference
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AML due diligence
Upfront Information
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Property Logbook
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Assess and advise on surveys and mortgage ability
Viewing
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Review Material Information
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Mortgage in principle
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Proof of funds and Buyer ID
Offer Made
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Mortgage application
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Contract pack
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Valuation
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Survey (where advised)
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Due diligence
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Enquiry of specifics relevant to the Buyer and their Lender
The current process
