View more on these topics

FCA chief Martin Wheatley ‘disappointed’ by lenders over MMR

FCA chief executive Martin Wheatley says he is “disappointed” at the way lenders have responded to the mortgage market review, saying lenders have not approached the regulatory changes in the right spirit.

The Daily Mail reports that while Wheatley agrees it is reasonable for lenders to decide what level of risk they are prepared to take, some lenders have gone too far.

Wheatley says: “It shows some lenders are not approaching the rules in the spirit they were intended.

“Every firm has a responsibility to treat their customers fairly and we would expect them to put good customer outcomes at the heart of everything they do. Leaving customers on higher rate deals does not fit with either of those criteria.”

Since the new regulations were introduced on 26 April, lenders have been criticised for not using transitional rules that waive the new affordability checks for existing borrowers who wish to switch to a lower rate mortgage. As a result, thousands of borrowers have been stuck on lenders’ standard variable rates, which are often much higher than the original rate when the mortgage was taken out. 

Customers and brokers have also complained about the increase in waiting times to speak with lenders as well as poor application processing times and service.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Clive Matthews 23rd June 2014 at 9:34 am

    It is not unusual to be left hanging on the phone for 40 minutes when trying to speak to a lender, and then sometimes the call drops out (flat phone battery) and you have to start all over again.
    This is a totally unacceptable state of affairs, and the Regulator need to do something about it (as they caused it)!

  2. Considering he does not live on the same planet as us.. are you surprised?

    He sets out the rules and then complains when we don’t break them.

  3. And just with what spirit exactly did Wheatley expect the lenders to approach the MMR?

  4. Then stop interfering!!!!
    Simples!

  5. The Cynical Broker 23rd June 2014 at 10:24 am

    With the ever present threat of retrospective action by the regulator, what on earth did he expect?? Lenders are never going to start at the more generous end of the spectrum, they will instead begin at the more pessimistic end and gradually work towards the more sensible middle ground.

    Mr Wheatley’s FSA / FCA seem incapable of bringing in new rules with clear guidance. He’s always saying after the event, that lenders aren’t acting in the “spirit of the rules.” It was the same with interest only, when after having driven a truck through it, he then claimed that lenders had “mis-interpreted the regulators guidance!” The regulator needs to give lenders clear guidance as to what it expects, and not assume that they will automatically interpret the “spirit” of them to the FCA’s satisfaction.

  6. Wheatley’s ‘disappointed”? When I heard lenders were still lending five and a half times earnings I was dumbstruck. And I thought that the FCA had told lenders to stick to 3.5 times. Either i dreamt the notion that the FCA were, for the first time in their pitiful lives, being sensible; or they are hopeless with their enforcement. Wheatley, you chump, set the cap and then if there are two or more examples of malpractice, ban the lender from lending for a suitable period. It really isn’t hard you know.

  7. Apparently the law of unintented consequences hasnt reached e14.

  8. So Mr Wheatley is “disappointed” again !!!

    Well I’m “disappointed” he manages to get out of bed every weekday morning !!!

  9. Andrew Pritchard 23rd June 2014 at 12:25 pm

    If he is disappointed by a poor interpretation of the ‘spirit of the rules’ then the time-bomb of slow processing times, higher qualification thresholds and a future rise in interest rates will mean that ‘disappointment’ is the least of his worries. If only half of the people on low tracker rates need the future stability afforded by long term fixed rate products. Then a conservative estimate is that it is going to take 15 months to move them (75,000 applications a month x 1.125m customers). Do you think that this industry can cope? What about all of those who cannot now re-mortgage and the economic risk being taken with them on variable rates? Add them to the list.

    Here is a recipe for chaos, the brunt of which will fall on fewer advisers. How many applications will fail due to the total non-acceptance of the slightest amount of bad credit?Will the lenders be patient whilst all who can get on board the fixed rate bus? Not likely.

    Time to start preparing your scapegoats Mr Wheatley, as this ‘disappointment’ is nothing to what is coming soon.

  10. well said #advice1 – the best comment ever on this quagmire

Leave a comment