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Sub-prime firms fear crackdown by FSA

The FSA looks set to come down hard on the non-conforming mortgage market in its thematic review on arrears due this month.

A senior industry source says he is concerned that the FSA will be toughest on the non-conforming sector as it presents higher risk.

He says: “The feeling we are getting is that the FSA might come down hardest on those that are quicker to repossess but circumstances are everything in these situations.

“We are worried that the FSA may try to make it even harder for lenders to repossess. The feeling is that the FSA wants to use the review to stamp its authority on the industry.”

Brentchase Financial Services mortgage specialist Mike Fitzgerald says: “I would be very surprised if the FSA did not use the information from the review to inflict a bit more pain on sub-prime lenders. The Government is putting the blame on this market but a lot of it is to do with the increasing cost of living.”

Mortgageforce chief operating officer Kevin Duffy says: “The FSA needs to be circumspect in how its findings are presented. At the moment, every piece of statistical or thematic analysis is being adopted by the media and being spun in different ways.”

The FSA would not comment on the findings of the review.

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The savings ratio is based on the latter – it is the difference between what we earn and what we spend, so it is effectively the net increase in savings held minus the net increase in debt owed.

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