CML statement of practice launched for Buy to LetMake Text Bigger
The Council of Mortgage Lenders (CML) has launched a statement of practice, which has already been adopted by 31 of its Buy to Let lenders representing 90% of the market, and by all members during 2015.
This statement is designed to provide clarity on how responsible Buy to Let lenders should operate and treat customers.
The statement highlights existing good practice and aims to ensure that there is a clear explanation of the obligations of buy-to-let borrowers on their mortgages. It also includes additional information from other organisations about the responsibilities of being a landlord, and is endorsed by the Residential Landlords Association, the Association of Residential Letting Agents, the Association of Mortgage Intermediaries, the Intermediary Mortgage Lenders Association, and the British Bankers Association.
Key principles are set out for lenders strategy and practice for:
- Lending principles
- Information given to customers
- Customer responsibilities
- Lender responsibilities on affordability
- Handling financial difficulty
- Fraud prevention
- Complaint handling
The “Consumer” Buy-to-Let lending framework will established next year under the FCA to comply with the Mortgage Credit Directive. Buy-to-Let lending will fall into one of three categories:
- Mortgages regulated by the FCA like residential mortgages. These are when the property is either partly occupied by the borrower or let to an immediate family member.
- Mortgages regulated by the FCA under the Mortgage Credit Directive Order 2015. These are “consumer” BTL as defined by the Order.
- Mortgages not regulated by the FCA. These are mortgages which are predominantly for a business purpose.
The CML statement of practice will cover any residential buy-to-let lending not otherwise covered by FCA regulation.
Paul Smee, Director General of the CML, said “lenders know how important it is to have a transparent mortgage market, in which borrowers can have confidence, and where lending policy is both responsible and clearly understood. The new buy-to-let statement of practice reflects what responsible lenders already do and offers a clear explanation of how buy-to-let lenders operate. We hope it will make a valuable contribution to understanding the buy-to-let lending environment.”
To see the full statement please CLICK HERE
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