The Intermediary Mortgage Lender’s Association has cautioned that proposals regarding changes to lending rules may not go as far as some people hope.
In its response to the FCA’s consultation paper on affordability assessment rule changes designed to help people trapped in a mortgage deal, the body says that the planned changes would not “adequately identify” the characteristics of these borrowers.
It adds that the planned changes would only benefit a small amount of those currently trapped.
This, plus the months-long time lag between lenders approving, testing and finally releasing new systems, Imla says, would disadvantage many borrowers.
Imla executive director Kate Davies puts forward the idea that the government should look at alternative measures, “including advanced legislation that was abandoned in 2013, to improve protections for those who remain unable to switch to a cheaper, more suitable mortgage deal.”
Said legislation was originally published in a 2009 Treasury Consultation paper and recommended that companies that interacted with mortgage holders were regulated by the FSA.
Ways of protecting those unable to switch, Imla adds in its response, should include the scrutinising of loan book sales and a broadening of the regulatory perimeter to include entities that acquire loan books.