Grant Shapps brands MMR “a step too far”
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Housing minister Grant Shapps has branded the Financial Services Authority’s Mortgage Market Review paper a “step too far.”
Speaking at the National House-Building Council conference yesterday, Shapps says he would not be able to get a mortgage under the current proposals.
When asked about the MMR, Shapps told delegates: “I am absolutely clear about this. I think it was at the point when I realised that I wouldn’t have been able to get a mortgage if the MMR changes went through that I thought this might be a step too far.
“There’s no point closing the door after the horse has bolted.
“The problem with the mortgage market was not some pernickity issue with whether you get X or Y percentage or what form you get the end user to sign.
“It was because there was a lack of central regulation on the way the banks were operating and their ability to carry on operating even after they didn’t have the balance sheet to do it as Northern Rock and Royal Bank of Scotland were doing.
“What we need is top level central regulation and not pernickity down in the dirt regulation and what you can and can’t do as a mortgage company.
“I hope the FSA will be getting that message. They are independent and are free to go off and do this work but I think it is important we learn from the lessons of the past without repeating them which is what I think they are in danger of doing.”
The Council of Mortgage Lenders recently called for a political debate on the Mortgage Market Review.
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Readers' comments (33)
Martin Tapper | 26 Nov 2010 11:56 am
HOOOORAAY!
Grant Shapps we may fall in love with you yet!
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colin | 26 Nov 2010 11:58 am
hhmmm....interesting, someone at last is waking up to the fact that the MMR is too OTT. The FSA seem hell bent on a risk free mortgage market.......well as we all know the pursuit of such will close all doors to home ownership aspirations for many. The industry has pretty much got its own house in order........its far harder to get a mortgage than at anytime in the last 10-15yrs........as usual the FSA come along with some highly convuloted idealistic paper that doesn t work in the real world. The fact they are unable to differentiate between Fast Track & Self cert speaks volumes for their grasp of our market.
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Bobby | 26 Nov 2010 12:00 pm
Hooray.
Someone important who says it as it is.
No disrespect to fellow brokers and cherry but this statement will be 100 times more affective in derailing MMR than anything the industry has done themselves.
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Danny Lovey | 26 Nov 2010 12:05 pm
It is pleasing thar Grant Shapps has got the issue on the MMR and can see the FSA over kill on the matter even if Mark Hoban cannot.
Do not underestimate Grant Shapps opinion
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jeff | 26 Nov 2010 12:14 pm
At last, somebody is smelling the coffee. Lenders need the space to be innovative and lend to price and risk. The FSA seem hellbent on choking the life out of the patient before the last man out of the door shuts the light off.
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Tory Boy | 26 Nov 2010 12:15 pm
The Big Dog has spoken....Hector Sants I hope your listening...
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Philip Bealing | 26 Nov 2010 12:28 pm
The stand out point for me in what Grant Shapps is saying is that he would'nt be able to get a mortgage perhaps even after having spoken with a good intermediary , if the F S A get there way. I wonder if other politicians would have the same problem ,if so other people in politics need to be made aware of this ,because it could be the same for them.
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Tom IFA | 26 Nov 2010 12:31 pm
To Bobby. This hasn't just happened there have been many who have been lobbying and highlighting facts for years hoping that one day sense will prevail.
Had we not had a change from the Labour Party we would have all been doomed.
I suggest that you as I and many of your colleagues have done and that is to keep your MP up to date with what is happening at the FSA and continue to do so until MMR and RDR have finally been put exactly where it belongs!
Heads will have to roll one day as the public realise what fortunes have been spent.
Lets win the battle first and point fingers later. FSA beware we know who to come after!
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Luke Atkinson | 26 Nov 2010 12:31 pm
Wow, someone pinch me, I must be dreaming?!
With the government minister in charge of housing as well as the CML and the AMI all airing concerns with MMR....not to mention the countless industry professionals that are crying out for some intervention on this draft paper, surely the bureaucrats will listen now?
Well done Mr Shapps.
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Pat Bunton | 26 Nov 2010 12:34 pm
CP10/16 was the problem, it has quite rightly been roundly criticised for attempting to get into too much minutiae and frankly parts of it made little, or no sense at all. We have long argued that once elected officials realised that the outcome of MMR as laid out in CP10/16 would be to stop perfectly sensible constituents; in this case Mr Shapps himself from obtaining even their current mortgage, the cat would be out of the bag. In fairness to FSA CP10/28 is thought through far better and has not fallen into the same traps as the previous paper. For everyone’s sakes, not least of all the normal man in the street let’s hope that common sense prevails as we move forwards. With a government minister saying stuff like this I am sure FSA will sit up and listen – this is not just the industry saying you are going too far, it is now branching out far wider than that.
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