But how can we take the FSA seriously as a regulator if its chairman is considering capping LTV and income multiples?
Such a proposal would be likely to see off most of the mortgage broking industry, with the exception of a limited few.
You have to question the motives of this proposal. Is there a plan behind this such as taking the number of brokers down to a small number, which would be easier to regulate?
Whose benefit would this move be for? It wouldn’t be for borrowers.
I agree with the comments made by Ray Boulger, senior technical manager at John Charcol, that this would be a reversal of criteria that in fact will also see no benefit to lenders. The housing market needs all the help that can be mustered, with the recent few billion or so injected to help lending just plugging more black holes on balance sheets.
Such a measure could also result in first-time buyers, who now have to put a much larger deposit down and could even be excluded, from entering the market for an extended period.
Well, until they are promoted, or seek higher-paid positions, which are few and far between given the economic downturn.
It is the FSA that needs a reorganisation at the top and to realign its focus on the real issues that have contributed to the global meltdown. In a nutshell, the problem was a complete knowledge-gap when it came to the US and UK regulators knowing the banks that they were meant to be overseeing.
The regulators also need to stop making knee-jerk reactions with ridiculous proposals that neither benefit anyone nor instil confidence.
The government and regulator need to give us all a chance to work hard, bring this country back from the brink and really help the general public.
Whatever plans have been introduced have been ignored by the banks, who have continued to fill their balance sheets with public money for no return on lending.
Whatever utterances of lending support are coming out of their back-room marketing boys, they are clearly not convincing their credit and risk policy makers who continue to stifle lending.
Alan J Nadin
Executive Mortgage Services