MMR: AMI warns FSA not to ban products
Share
The Association of Mortgage Intermediaries says it is concerned that existing and future mortgage borrowers could be unnecessarily excluded from access to finance by some of the measures in today’s Mortgage Market Review.
Robert Sinclair, director of AMI says the regulator is right to address certain aspects of the self-certification model. However, this product is necessary for some consumers, such as those who may have fluctuating or seasonal income.
He says: “The regulator would be better served by introducing more stringent measures on those lenders operating in this area of the market as they begin to lend again, rather than penalising all consumers. We are concerned about the impact on lenders’ costs and therefore the cost of borrowing on those who benefited from fast-track in the past. These were consumers with good credit history who were deemed low risk by lenders, often with lower LTV.”
Sinclair says it is also concerned that proposals to introduce stringent criteria for lending may significantly increase the cost of borrowing for ordinary, responsible consumers.
He says: “While we must ensure lending is responsible we should not remove all responsibility from consumers. Similarly, in transferring all liability to lenders, we need to ensure that this does not unduly restrict existing borrowers from having access to the full market. We do not want to create mortgage prisoners.
“It may be necessary to consider segmenting the purchase from the re-mortgage market. There will have to be careful interpretation of the testing of income so as not to discriminate against some sections of society.”
He adds: “We fully support measures to ensure all mortgage advisers and arrangers, including intermediaries, are registered individually with the regulator. The regulator is also right to ensure full disclosure from all those dealing with consumers. This must apply equally to independent mortgage intermediaries as to those who work directly for banks and other financial institutions.”
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
