Nationwide reveals MCD changes

Sarah Davidson

January 12, 2016

Nationwide has published detailed information for brokers outlining its approach to new rules to be introduced under the Mortgage Credit Directive.

New EU MCD dedicated web pages have been launched on its key intermediary websites NFI Online and TMW Online, detailing the changes affecting each brand and carrying new updates as they are made.

Brokers are also invited to submit any questions they have, with the aim of adding to the frequently asked questions section of the site.

The society will be implementing changes ahead of the 26 March 2016 deadline, and has confirmed it will be using an updated Key Facts Illustration, known as KFI+, from day one rather than the European Standardised Information Sheet.

This will include additional MCD disclosures within the relevant sections, rather than as a stand-alone document.

As the MCD requires lenders to provide the customer with a binding offer and a reflection period, Nationwide will consider an offer to be binding from the date it is issued, and the customer’s acceptance of the mortgage conditions will be when the funds are withdrawn.

The reflection period will last for nine days, a calendar week and two days to allow for postage, and a customer can choose to waive the reflection period either through Nationwide or their solicitor.

Pipeline cases that have been submitted but not offered will not need to have a new KFI produced.

However, for applications submitted before MCD implementation but offered afterwards, additional information will be included with the mortgage offer.

Nationwide will also be accepting consumer buy-to-let applications across the standard TMW product range from intermediaries signed up to the FCA’s new consumer buy-to-let register, which allows brokers to advise on regulated mortgage contracts.

Additional questions on the Nationwide mortgage application form will need to be answered to identify consumer buy-to-let borrowers, while unaffected borrowers will be asked to sign a declaration that they understand that they are not being regulated as consumer borrowers.

Additional information that may be needed to determine the appropriate type of application ahead of the changes is already being requested as necessary as part of the underwriting process.

Ian Andrew, managing director of group intermediary sales at Nationwide, said: “We are outlining our approach to the changes needed ahead of the introduction of the MCD regulations to support intermediaries in their planning and preparation for the new rules.

“In terms of the process, brokers should not experience a significant impact, particularly given that many of the changes needed have either been introduced at an earlier stage, such as revisions made in advance of the MMR rules, or are technical measures that have no impact on the application process or decision to lend.

“As part of the ongoing programme of communications, Nationwide and TMW will continue to offer assistance to our intermediary partners to prepare themselves ahead of the changes in regulation.

“This includes support through our BDMs, online and through telephone support, as well as our new Broker Chat facility, to enable as smooth a transition as possible.”

There will be no material changes to Nationwide’s existing lending policy.

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