Don't just focus on problems in MMR

19 July 2010

I ’m sure the Mortgage Market Review is going to be a hot topic for a number of weeks and we should not underestimate the potential impact of the proposed changes.

But there was a fair bit of knee-jerk journalism last week. Minutes after the consultation paper was issued there were some pretty salacious headlines which, to be fair, may prove correct.

There isn’t much in this paper that wasn’t in the previous one but I suppose it’s starting to dawn on people that the proposals are likely to become reality.

Lenders being made responsible for affordability got interesting headlines, with one stating that brokers would become almost irrelevant.

Strange, as lenders have always been responsible for affordability because they are the ones lending the money.

The fact the Financial Services Authority is making this law will have no bearing on their strategies.

Another headline stated that lenders will limit distribution as a result of the MMR. Again, I disagree.

They will limit distribution for several reasons, none exclusive to the MMR.

Income verification is a big issue and I can see it costing lenders and borrowers a lot, but there are many ways to verify income and I’m sure lenders will come up with solutions, whether they choose to see payslips or outsource the process.

So rather than staring at problems I’m looking for opportunities in the MMR, and I’ve spotted a number already.

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