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Imla slams FSA’s tough line on securitised lenders

The Intermediary Mortgage Lenders Association has attacked the FSA for “heaping blame” on securitised lenders and voiced concerns that stricter controls will stifle innovation.

The FSA’s mortgage market review, published today, says high risk lenders may be subject to tighter regulation.   

The FSA says it will consider whether to apply asset limits to firms engaging in high-risk lending and whether the current prudential requirements for non-banks are fit for purpose.

The regulator is also proposing a ban on self-cert mortgages.

Imla executive director Peter Williams says: “Although the FSA admits to some of its own errors, it is playing to the gallery by heaping blame on non-banks and non-income verified lending as being at the centre of the market’s problem. This is too simple an argument.

“Non-banks weren’t the dominant lenders in the markets in which they operated and non-income verification lending was underpinned by credit scoring systems. Non-banks play an important role in the UK mortgage market and a regulatory environment which makes it difficult for them to compete will only be detrimental for consumers and for innovation in the marketplace.”

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