The CML’s paper insists that lenders are not profiteering on their mortgage pricing, or asking consumers to pay excessive charges as, it says, lenders are commercial companies and entitled to a fair return.
It says:”We would caution the FSA against becoming a price regulator, either in the case of arrears charges or more widely.“
“We believe the FSA should exercise caution in its work on charges and fees, if it is not going to lead to unintended consequences across the market.
“The FSA should not assume a higher price is ‘excessive’ because it is higher.”
In its MMR response the CML also argues that the cost/benefit analysis for proposed reforms is based on a market that has recovered, rather than the market as it is now.
It says this is potentially damaging, as it does not take account of the need to ensure that regulatory change is timed to ensure that it promotes market recovery.
The CML has also put forward evidence that arrears levels on “fast track” business do not justify income verification in all cases.
It proposes that fast track should be allowed to continue with appropriate safeguards in place.