FSA launches mortgage market review
October 20, 2009
The Financial Services Authority (FSA) has announced it is to review the mortgage market, which could benefit those looking to get on the property ladder.
Among its proposals is that people will be unable to borrow money unless they can pay it back and lenders will be responsible for making sure this will happen.
Jon Pain, FSA managing director of supervision, said: "We recognise that we need to bring about a step change in regulation and we need to act now to address the issues we have identified."
He expressed that the mortgage market has received an "extraordinary upheaval" over the last 18 months, which has worked favourably for the vast majority of borrowers.
Borrowers should no longer be put at risk with so-called toxic combinations in mortgage products which may make them financially vulnerable.
Furthermore, mortgage advisers will have to be personally accountable to the FSA, which will ensure consumers are getting the best advice possible.
The proposals will cover all lending secured on a home, as well as the buy-to-let sector.
During the months, 19,200 first-time buyer loans were granted and 33,400 to home movers.
In response to the FSA’s proposals, the CML revealed that it was looking forward to "regulatory fairness" being installed in the mortgage market, which would make it better for lenders, intermediaries and consumers.
Michael Coogan, CML director general, stated: "We agree with the FSA that regulation in itself cannot resolve the problems of the recent market."
As part of the plans, the FSA will be seeking views until January 30th 2010, although the full feedback statement will not be issued until March.
This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.