MMR is vital to protect consumers, says Hoban
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Mark Hoban, financial secretary to the Treasury, defended the Mort-gage Market Review in a debate in the House of Commons last week.
Conservative MP Robert Syms opened the debate, arguing that in its current form the MMR would have a disastrous effect on first-time buyers, borrowers and the economy.
But Hoban says the MMR is an essential step to ensure consumers and lenders are protected.
Syms says: “The market failures the MMR is designed to address affect only a small number of lenders in the market and some of these are no longer active.”
He also claims the regulator’s proposals are not balanced and take a patronising view that customers need protecting from themselves.
He called for the MMR to make it easier for smaller lenders and building societies to operate in the mortgage market.
He says: “If we get it wrong it will be disastrous and we will all find people in our surgeries who can’t understand why they could get a mortgage a few years ago and now they cannot.”
Labour’s John Woodcock, MP for Barrow and Furness, and Adrian Bailey, MP for West Bromwich West, also condemned the MMR as did Marcus Jones, Conservative MP for Nuneaton.
Hoban reacted by telling the Commons there was a lot of concern expressed about the MMR but there was also a lot of misinformation.
He says: “Increased lending can force up house prices beyond the reach of those who want to get on to or move up the housing ladder and this puts home ownership further and further out of reach for many individuals.
“We do not want lenders to put their solvency at risk through aggressive lending.”
But he adds: “Nothing is set in stone. The FSA has made it clear that it will assess fully the potential impact on the market before implementing any rule changes.”
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