The Intermediary Mortgage Lenders Association has welcomed the chancellor’s plan for a working group to focus on mortgage-backed securities.
The trade body supports Alistair Darling’s plan to create a Mortgage Working Group to help create a gold standard for UK mortgage-backed securities.
But IMLA, which represents many specialist lenders that fund themselves through the wholesale markets, warns it will not solve the urgent short-term problem in the industry.
Peter Williams, executive director of IMLA, says: “IMLA will be pleased to support this and provide its expertise to this initiative.
“But we note the working group is expected to report in the summer of 2008 and that specific measures will not be announced until the Pre-Budget Report in the autumn – that is far too long to wait, and we believe progress can and should be made on this matter more quickly.”
He adds: “While this is an important initiative for the long term health of the market, it will do little to alleviate the urgent short-term funding problems that lenders currently face.
“It is essential that the Tripartite authorities continue their programme of intervention, providing additional liquidity and implementing other measures to support the return of confidence to the wholesale markets.”