MMR to cost industry millions

The feedback and final policy on Arrears and Approved Persons in the Mortgage Market Review update provided by the Financial Services Authority recently said, “One TPA stated one-off costs for following this guidance of £1.6m for system development, implementation resource and reporting costs.”

If similar costs were incurred across the industry, the MMR would cost UK mortgage servicers almost £21m collectively. However, Phoebus Software says at least five of the thirteen companies currently providing lenders with servicing support - including CapQuest Group, Crown Mortgage Management, Exact, and Oakwood Global Finance - will not need to develop systems any further to follow the guidance. But the combined cost of updating the remaining 8 servicers will be approximately £14.4 million.

Paul Hunt, managing director of Phoebus Software said, “The good news is that systems developed by Phoebus Software are up to date and able to cope with these changes. The bad news is that still leaves eight servicers facing substantial bills to update their systems.

"This means the MMR is going to have an even bigger impact on mortgage lenders than we realised.

"Collectively, unprepared servicers are going to need substantial development that will have to be paid for. Lenders will end up footing the bill – ultimately it’s customers who will suffer.”