MMR: BBA warns on excluding higher-risk borrowers
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The British Bankers’ Association has warned that the Financial Service Authority’s proposals for mortgage regulation could end up freezing the self-employed and first-time buyers out of the market.
The trade body says it welcomes the FSA’s shift of focus to overall affordability, but has expressed concerns over measures to clamp down on loans deemed to be high risk.
A spokesman for the BBA says: ” “It should be a firm principle of mortgage regulation that higher-risk borrowers such as self-employed people and first-time buyers are not effectively cut out of the market.
“The issue that faces all of us – lenders, borrowers and regulators – is ensuring the risk of taking out a mortgage can be shared effectively.
” Any new rules must not serve to create unreasonable obstacles either for lenders or for borrowers.”
Readers' comments (5)
Anonymous | 19 Oct 2009 2:57 pm
I think the FSA would like a world where no one does any business or makes any money.
The FSA do not live in the real world.
They create red tape so that they can give themselves a job rather than standing in the dole queue.
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Anonymous | 19 Oct 2009 3:28 pm
What the FSA seem not to understand are the implications of those in the sub prime sector who have been loaned to in the past and are continuing to make their contractual payments in full and on time. Are they to be irrevocably tied to their current lender with no flexibility of opportunity to change their deal, port their mortgage to another home etc, etc. The only hope for these borrowers is that at some point they will fit main stream lenders criteria in some way shape or form and manage to extract themselves from their predicament. However, those who used the self cert approach in the past are unlikely to ever be able to change unless their proveable income fits.
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Anonymous | 19 Oct 2009 5:00 pm
Affordability calculators are good at the time ,but the the client completes on the mortgage and takes loans and credit cards out in the future.Loans and credit card companies should be made to look at affordability when granting personal loans and credit card limits. Mortgage protection should also be included in affordability as circumstances can change in the furture.
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Robert White | 19 Oct 2009 5:01 pm
Affordability calculators are good at the time ,but the the client completes on the mortgage and takes loans and credit cards out in the future.Loans and credit card companies should be made to look at affordability when granting personal loans and credit card limits. Mortgage protection should also be included in affordability as circumstances can change in the furture.
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Anonymous | 19 Oct 2009 5:12 pm
SO ITS NOT WORTH BEING A SELF EMPLOYED ENTREPRENEUR IN THE UK - I MEAN YOU ARE NOT GOING TO BE ABLE TO GET A MORTGAGE, SO NO HOME. WHAT A GREAT PLACE TO LIVE! THANKS FSA, YOU SHOULD HAVE REGULATED SELF-CERT IN THE FIRST PLACE, NOT BLOODY BAN THEM NOW. WHAT ARE S/EMP MEANT TO DO NOW...?
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