Mortgage advisors in the United Kingdom have plenty of reasons to consider secured loans (referred to as second charge loans) and, according to the UK Mortgage Conduct of Business (MCOB) rules they must do so. This statutory regulation has just passed its first anniversary and what effect it has had on both regulated on unregulated products and services may give us pause.
One of the myths about secured loans is that this second charge market in the UK is not subject to regulation. While it is true that it is not subject to the control of the countrys Financial Services Authority in the way that the first charge (unsecured) market there is, second charge loans up to 30,000 US are regulated by the UKs Consumer Credit Act.
The federal government also has a clear system in place to deal fairly with its countrys citizen customers. Not only that -14 of the primary second charge loan lenders have formed a self regulatory market voluntary. It is called the Finance Industry Standards Association (FISA) and it has stepped in to regulate over 200 finance brokers in the UK.
The important change for both the first change and second charge loans market is not the law...
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