The FSA says its proposals to introduce income verification on all mortgage applications should not exclude self-employed borrowers from the mortgage market.
Speaking at the Mortgage Business Expo in Olympia, London last week, FSA director of small firms and contact centre Lesley Titcomb also challenged the extent of dual-pricing by some lenders, questioning why lenders bother to market some intermediary products at all as they are such poor value.
Titcomb said those who questioned the need for the mortgage market review “should take their heads out of the sand” and argued that the financial crisis has shown that existing FSA rules are not enough to prevent irrespon- sible lending or borrowing, nor to secure the fair treat- ment of customers.
She said: “This is also a good opportunity for me to dispel some of the myths that are out there about our proposals. Does anyone really think that we really want to stop self-employed people – over three million people – from ever getting a mortgage again?
“And do we really want to make all lenders ask their customers how much they spend on cigarettes and alcohol? The answer to both, of course, is no, but you could be fooled into believing otherwise by some of the comments we have seen so far.”
On dual-pricing, Titcomb insisted it was a commercial issue and not an area where the FSA would intervene.
However she added: “Where an intermediary product is of such poor value compared with a direct product from the same lender, we question why lenders would continue to market that product.”