Calls for greater intervention continue to resound across the market – and AMI is having increasingly frequent meetings with those responsible for deciding what shape, if any, this intervention could take.
It is not that long ago that the mortgage market was compared to a forest by leading policy makers who said that a forest fire was a healthy thing.
Wise sounding words about the healing benefits of a quick blaze and that it was necessary to cure the over heated market to allow new growth by killing anything that had become over grown, now ring hollow.
The view was that the mortgage market was isolated from the real economy, that it would suffer a necessary correction which would not impact on consumer confidence, was never an analysis I subscribed to.
Now the urgency for action is only matched by the seeming impotence of effect of that action.
It’s at times like this that leadership is needed – both from the market and from politicians. Hank Paulson’s decision to bring Fannie Mae and Freddie Mac into state conservatorship brought a moment of confidence and a seeming respite.
Events have cast a shadow over the plan. In my view, there is no silver bullet solution to the market’s problems. But there are a number of steps that can be taken:
* The government, through the Crosby review, needs to address the capital markets in the manner the Association of Mortgage Intermediaries has proposed. This way it can help the mortgage market show case its strength and solid foundations in order to attract new support from sovereign wealth funds and the pensions industry.
* The Bank of England needs to extend the SLS and offer its terms to a wider group of lenders for consideration to be given to establishing a mortgage backed security scheme as detailed in our response to the Crosby review.
* We need Stamp Duty land tax to have a root and branch reform – and to roll out the other retail measures we have proposed.
All of these points are discussed in more detail in the AMI proposals on our website at www.a-m-i.org.uk – and they have been sent to government and Crosby etc.
The coming weeks see the party conference season in full swing and I will be attending to present our case to ministers and their shadows.
AMI is battling hard for its members and their customers.