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FSA toughens up regulation of sale-and-rent-back

The Financial Services Authority is planning to regulate all firms and individuals selling sale-and-rent-back agreements.

The FSA introduced full regulation of the market in June 2010 but firms were only regulated if rent-back was their main business.

But in its quarterly consultation paper, the FSA says it is concerned that a considerable number of unregulated rent-back transactions are happening.

It believes some small firms and individual investors who are active as rent-back providers are avoiding regulatory requirements because they claim they are not carrying on rent-back activities ‘by-way-of-business’.

It is seeking to change the ‘by-way-of-business’ test for agreement providers entering into rent-back transactions, so that even entering into one transaction will be treated as being carried out ‘by-way-of-business’, unless it is carried out by a family member.

In ts consultation paper it also reveals that it has decided against reviewing the current exam standards for mortgages.

It says: “Due to our ongoing Mortgage Market Review, we have taken the decision to postpone the review of examinations standards in this area so we can take into account any changes required by the MMR.

“Therefore, this consultation only proposes a review of the examination standards for undertaking pension transfer activity and managing investments.”


Nationwide changes policy on shared equity loans

Nationwide will no longer lend on an interest-only basis for shared equity mortgages as part changes to its shared equity criteria. The lender is also including 3% of the equity share loan as an outgoing in clients’ affordability calculations. It says this change has been made to ensure borrowers can afford to repay the mortgage. […]

CML broker sales data is called into question

Intermediated sales figures from the Council of Mortgage Lenders have been branded misleading after it was revealed that the trade body classes some in-branch sales as broker deals. Figures from the CML released earlier this year showed brokers claimed a 60% share of the mortgage market in Q1 2011. But last week figures from the […]


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