Wednesday 2 December 2015

CML Lenders' Handbook Amendment for Mortgage Credit Directive

The CML will be publishing a change to the Handbook on 1 February 2016. as a result of the Mortgage Credit Directive. 

Additional wording in clause 10.2 is to be introduced to reflect the mortgage credit directive and concepts of binding offer and reflection period. The wording allows for the conduct of the borrowers agent (in this case, the conveyancer) to act as the acceptance of the mortgage offer on the borrowers behalf, by submitting a Certificate of Title (COT) to the lender.  This will allow the lender, in the case where the lender does not require the borrower to formally accept the mortgage offer, to have evidence of the acceptance by virtue of the COT being submitted; it also indicates that the borrower has bought the reflection period to an end.

This change is in conjunction with clear explanations in customer literature by lenders about accepting the offer and the reflection period; and a proposed change in the Approved Certificate of Title for E&W which reflects the wording in the Handbook.

Section 10.2 is due to change to : We shall treat the submission by you of the certificate of title as confirmation that the borrower has chosen to proceed with our mortgage offer and as a request for us to release the mortgage advance to you. Check part 2 to see if the mortgage advance will be paid electronically or by cheque and the minimum number of days notice we require.  

Law firms need to start thinking about adapting their Terms and Conditions in light of pending Handbook change.  

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