Mortgage News
FSA to block products with MMR, claims CML
The FSA is blocking products from the market under the Mortgage Market Review because it views lenders and brokers as “drug-dealers who get innocent consumers hooked for profit-driven purposes”, according to the Council of Mortgage Lenders (CML).
At its recent conference, CML chairman Matthew Wyles said he worried that MMR proposals could have serious unintended consequences on the ability of consumers to get mortgages.
He said: “Consumers want relatively straightforward access to finance, they want to be able to afford their commitments and borrow on terms that fit their circumstances. They want a good deal that does not tie them in too inflexibly.
“We would like the FSA to use the consultation period to work these issues through with us so that we can ensure the framework of rules we end up with does not create unintended and damaging side-effects.”
Jonathan Cornell, communications manager at First Action Finance, said he also disagreed that lenders and brokers were enticing people to buy products by giving them bad advice.
He said: “That is not the case. The majority of lenders and brokers advise properly on products. Now there is the danger that the MMR will go to the other extreme and block some borrowers from the market in its drive to clean up the mortgage industry.”
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Linda Will, sales director of In The Loop Mortgages, said she also believed the regulator had not fully analysed the consequences of its proposals.
She said: “I think it is so dangerous for the FSA to outlaw a whole set of products, such as self-certification, just because it believes that lenders have been lending irresponsibly. I think it is better for lenders to price for risk rather than for the regulator to make a knee-jerk reaction and block people from the market by outlawing products.”