60 Seconds with.....Chris Cummings

26 October 2009 | By Robyn Hall

What’s your initial reaction to the proposals in the Financial Services Authority’s mortgage market review?

 

This is a social engineering project and requires a wider debate than simply an FSA discussion paper being published under the banner of a mortgage market review. There is a desire by the Treasury and Bank of England to structurally reform the housing market to avoid future housing bubbles. The FSA is being used as a deliberate mechanism to bring that about and some of the things being proposed in the review are about changing society, not the mortgage market.

What percentage of these proposals do you think are a fait accompli?

There is still a lot to play for. We are coming up to a General Election and there could be a change of government, which may bring about a difference in thinking, both in terms of the regulator and social policy. This is just the time when good trade bodies leap to action and try to protect their membership and serve consumer needs. If you’ve not already joined AMI, use some of the £11.7m in regulatory fees we have saved the industry this year and sign up today.

Why does the FSA seem so confused about the difference between self-cert and fast track?

The FSA has come under intense political pressure to ban self-cert mortgages but a lack of lender data has got us into this position. Lenders were not robust enough in providing data showing the difference between fast-track and self-cert and explaining how they policed them or how they could guarantee that no self-cert mortgages were done on a fast-track basis.

It’s difficult to write a rule that only covers half the market, so rather than try and differentiate between fast track and self-cert the FSA has come up with some rather blunt proposals - a sledgehammer to crack a nut.

AIFA and AMI do a lot of work behind the scenes. can you be more open about what you actually do?

This is something that we constantly grapple with. We need to protect our members’ interests by not being too open. We can have rigorous discussions with the FSA and the Treasury because we don’t go and tell the world what could have happened and who said what to whom.
That allows open negotiation. Anybody who has been through a commercial negotiation knows the importance of confidentiality.