Labour MP George Mudie was right in his criticisms of the Financial Services Authority and the Mortgage Market Review – it is going to damage the market, and it’s almost dead anyway.
What they are failing to address, which will be the problem over the next couple of years, is that borrowers are stuck with their lenders.
Look at all the self-cert, sub-prime and then products with combinations of sub-prime and self-cert etc that many existing borrowers are on.
Many people have not defaulted due to the low rates. As soon as rates creep, up we will see exactly what is happening in the US.
A step back to the old school underwriting model is needed, where common sense decisions can be made.
While we live in the ’computer says no’ world, the problems are only building.