The Building Societies Association is warning about mortgage borrowers being trapped by the Mortgage Market Review despite transitional arrangements in the last paper.
Speaking to the BSA conference in Manchester outgoing chairman Peter Griffiths some borrowers will not be able to meet the changed affordability criteria.
He believes that despite all the positive changes by the Financial Services Authority a substantial number of mortgage borrowers will remain trapped.
He says: “This issue relates to existing mortgage borrowers who may have a spotless payment record but whose financial circumstances mean they can’t meet the affordability criteria that lenders will be required to apply.”
He calls on the regulator to develop an exceptions policy with lenders to allow them more flexibility over such borrowers.
Griffiths also warned that increased income verification checks could lead to intrusive questioning and make home buyinga substantially longer process.