MMR: BSA hits out at self-cert ban
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The Building Societies Association has attacked the Financial Service Authority’s decision to abolish self-cert, and warned some of the regulator’s proposals could have unintended consequences for the mortgage market.
Paul Broadhead, head of mortgage policy at the BSA, says: “We have always regarded self certification mortgages as a niche product for a small group of borrowers, and don’t believe that such mortgages should have reached a market share of anywhere near 45%.
“However, such products are suitable for a minority of people, and an outright ban is not appropriate.”
On affordability the trade body sees the regulator’s move away from maximum LTVs and loan-to-income ratios as positive.
Back in March it had been thought that the FSA would look to cap LTVs following concerns about mortgages at and above 100% LTV.
Broadhead says that the BSA welcomes the need for lenders to focus on disposable income but worries about how this will work in practice.
He aso says that the FSA’s commitment to look at the rules for non-deposit taking lenders is good news as it would mean a more level playing field for building societies.
But he remains sceptical that some of the FSA’s proposals will curb lenders’ flexibility.
He adds: ”While much of the detail in the paper is sensible, we have significant reservations about the possible unintended consequences of some of the ideas expressed.
“We need a sensible balance between appropriate regulation and allowing people to buy their own home when they can afford to do so.
“The vast majority of the British population aspire to home ownership and these proposals must not frustrate the sensible ambitions of potential homeowners.”
