Mortgage trade bodies have praised the FSA for listening to their concerns and creating a more balanced and sensible set of proposals.
Today’s MMR final consultation paper is less prescriptive than earlier papers in areas such as interest-only and affordability checks. When its responsible lending paper was published in July 2010 trade bodies warned the proposals would the proposals would lock borrowers out of the mortgage market.
CML director general Paul Smee (pictured) says: “Whilst there is much detail to be pored over, the FSA’s new proposals seem to strike broadly the right balance. If lenders are to make their contribution to improving the supply of housing and to the wider agenda for economic growth, then they need a regulatory framework which also supports that objective.”
Association of Mortgage Intermediaries director Robert Sinclair says: “They have brought responsible lending into a place that just about fits the current market, therefore they have taken away a lot of the nastiness and listened to the market, which has taken us to a place which is sensible.”
BSA head of mortgage policy Paul Broadhead says: “The devil is always in the detail but these proposals seem to represent a welcome shift in policy by the FSA.
“No-one is looking for a regime that permits lax lending practices, however the original proposals were in danger of locking credit worthy borrowers out of the market or imprisoning those with immaculate payment records, but non-standard profiles, in their current homes and loans.”