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70% MMR is natural change

Leading mortgage commentators say a lot of the proposals in the FSA’s mortgage market review discussion paper would have happened naturally due to market forces and the credit crunch.

At a Money Marketing mortgage round table, Mortgageforce managing director Kevin Duffy said 70 per cent of what the MMR is intending to accomplish would have been achieved through natural change.

He said: “Markets often heal themselves. They will not necessarily need a great deal of legislation.”

Exact managing director Alan Cleary says: “If you look at self-cert, it has gone, it does not exist and regulation has not taken that out, lenders have taken it out because the supply of money has changed.”

Platform sales and proposition director Lee Gladwell said: “I think self-cert is an example of where the industry had pretty well addressed all of the issues prior to the MMR. What we are now going to get is over-regulated solutions.”

Duffy said he was concerned that banning self-cert mortgages could prolong the economic downturn because self-employed consumers would not be able to buy houses.

He said: “There is no way we are going to emerge from the downturn unless people have the ability to buy a home, to affect home improvements and get the chain working again because many of them are at the first-time buyer level.”

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