Of the brokers polled at IRESS’ mortgage and protection roadshows in October, 29% stated they have already made changes to their business and understand the effect the MMR will have when it comes into force on April 26th.
A further 40% believe they understand the regulation but have yet to make changes to their business. The remaining third (32%) of brokers do not yet feel fully prepared for MMR and haven’t made changes.
Brokers anticipate the biggest impact of the MMR to their market place will be a lengthened mortgage application process with 35% now expecting lenders to take longer due to the regulatory requirements.
IRESS’ latest Mortgage Efficiency survey showed that 22% of lenders already take longer than 30 days to produce an offer on average as a result of changes made ahead of April, and many expect this to increase further next year.
Also, one in four (25%) brokers believe an increased proportion of applications will be rejected following the MMR, with a further 29% suggesting more stringent affordability checks will decrease business volumes.
Over half (56%) of brokers suggested that it will mean they spend more time interacting with lenders on each case. A further one in four (26%) feel the lengthened process will increase the costs for them and their business while 14% believe the changes will place a greater emphasis on their IT systems.
Jon Whitmore, head of enterprise & sourcing sales at IRESS UK, said: “The MMR is just around the corner and brokers and lenders alike are in a race against time to make sure they are ahead of the game.
“Brokers are benefiting from a booming mortgage market at the moment but many still need to take steps to ensure their business and systems are fully prepared for the impact of regulatory change.
“However the post MMR picture is still far from clear and we don’t expect it to become so until big lenders establish a best practice for the mortgage process – and brokers’ involvement.
“The time to offer will more than likely increase as a result of MMR, but both lenders and brokers will need to adapt to make the most out of a new market.”