02 February 2010
Mortgage Market Review by the Financial Services Authority
The FSA has been consulting about major reforms to UK mortgage market to ensure that it works better for consumers and is sustainable for all market participants.
The key proposals are:
- Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer’s ability to pay;
- Banning ‘self-cert’ mortgages through required verification of borrowers’ income;
- Banning the sale of products which contain certain ‘toxic combinations’ of characteristics that put borrowers at risk;
- Banning arrears charges when a borrower is already repaying and ensuring firms do not profit from people in arrears;
- Requiring all mortgage advisers to be personally accountable to the FSA;
- Calling for the FSA’s scope to cover buy-to-let and all lending secured on a home.
The FSA’s discussion paper is available from :
http://www.fsa.gov.uk/pubs/discussion/dp09_03.pdf.
The NFOPP’s response is downloadable via the link below this article.
The FSA will publish a feedback statement in March. Implementation will be phased, with the focus on speed for areas of high detriment, such as arrears.
Download - FSA Mortgage Market Review 29.1.10 final.pdf
