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FCA: Lenders’ MMR questions are just ‘teething problems’

Over-zealous affordability checks by lenders are just “teething problems” and not evidence of unintended consequences of the mortgage market review, according to the FCA.

Since the introduction of the MMR in April, brokers have complained that lenders have gone too far with their affordability checks, with some scrutinising spending on items such as pet food and dinner parties.

Speaking at the FCA’s annual public meeting in London yesterday, FCA chief executive Martin Wheatley said: “I know that while a lot of firms did get all their systems and processes in line ahead of the MMR, I have heard all the stories of those that are not getting it right and are being too granular.

“And typically when we hear that we go back and have a discussion with the firm. It is still relatively early days for the MMR and those issues are being ironed out.

“To say these are unintended consequences is probably too strong – I think we are just seeing some teething problems.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. I hope for their sake these “Teething problems” do not linger on as long as the RDR problems. I wonder by now if the FCA will admit there are a great number of Unintended consequences which have disadvantaged a great many clients.

  2. As usual FCA and lenders senior management not aware of the real issues.
    The lenders have underspent on resourcing the new situation and can’t cope with perfectly ordinary cases half the time within a reasonable timescale.
    If these people who claim that its all teething problems had a couple of hours per day wasted on holding in queues they would soon change their views.

  3. Client has over £1 million equity and wants £150k in interest only. This meets with the lender’s stated criteria. Repayment vehicle of ‘sale of property’ fits and clients intend to downsize in the future. 17 year term and lender has requested that I provide details of downsized property and location!
    Madness?

  4. Grey Haired Underwriter 21st July 2014 at 10:57 am

    As far as a lender’s individual relationship with the Regulator is concerned the comments coming back are ‘it’s the rules – get over it’ but publicly the FCA are so conciliatory and reasonable. I just hate the hypocrisy.

  5. Dick Sprinkler 21st July 2014 at 4:45 pm

    Using that logic removing all my teeth will cure my toothache !

    Mr Wheatley – you’re a worry you really are the adverse effects of MMR are yet to play out and when they do – oh dear or dear oh dear !!!!

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