FCA mortgage and mutual sector manager Lynda Blackwell believes the tough affordability measures used by some lenders post-MMR will be relaxed as the new rules bed in.
The regulator has previously said it had “wondered why” some lenders had included bizarre questions in their affordability assessments post-MMR.
In the weeks following the implementation of the new rules, on 26 April, brokers complained that some lenders were asking whether borrowers serve steak at dinner parties or how much their client spends on things like grooming and gym membership, arguing that some lenders had gone too far.
Speaking today at the Association of Short Term Lenders’ annual conference in London, Blackwell said she believed the “pendulum has swung a bit too far” but that affordability requirements will “calm down” once lenders get used to the new rules.
She said: “We are on record as saying we think the pendulum has swung a bit too far… This is just a market reaction but we do think it will calm down.”
As part of the MMR, lender have to ensure borrowers can afford their mortgage and are obliged to take into account contractual payments, basic essentials like gas, food and water and basic quality of living costs such as clothes and basic recreation. But beyond that, the rules allow for the lender’s discretion.