Amendment incorporates new concepts of binding offer and reflection period

An amendment to the Council of Mortgage Lenders’ Handbook, to be published in the online version of the Handbook on 1 February 2016, is being made to incorporate the concepts of binding offers and reflection period, introduced by the Mortgage Credit Directive (Mortgage Credit Directive Order 2015), which comes into force on 21 March 2016.

Additional wording in clause 10.2 allows for the submission of a certificate of title by the borrower’s agent to the lender to act as the acceptance of the mortgage offer on the borrower’s behalf, where the lender does not require the borrower formally to accept the mortgage offer. It will also indicate that the borrower has bought the reflection period to an end. This change is in conjunction with clear explanations in customer literature about accepting the offer and the reflection period.

The revised clause (with the added words in bold) reads: “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.”

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