Commenting on the mortgage regulation proposals published today (Monday 19th December) by the FSA, Paul Broadhead, Head of Mortgage Policy at the BSA, said:
"The devil is always in the detail but these proposals seem to represent a welcome shift in policy by the FSA. No-one is looking for a regime that permits lax lending practices, however the original proposals were in danger of locking credit worthy borrowers out of the market or imprisoning those with immaculate payment records, but non-standard profiles, in their current homes and loans.
"This seems to have been avoided which is good news for the self-employed, those in existing self certified mortgages and people with negative equity. The new regulations appear to have struck a reasonable balance between allowing lenders flexibility when assessing affordability, whilst maintaining a sensible level of consumer protection.
"The transitional arrangements will help people who already have a self certified mortgage - banned under the new proposals - re-mortgage to a more standard loan. Lenders will be able to take into account borrowers repayment performance rather than a prescriptive set of income and affordability criteria.
"We are pleased that the FSA has addressed our concerns. A thriving and competitive market, which encourages innovation to support the ever changing needs of would-be home owners and home movers, is in all our interests."
Hilary McVitty / Rachel Wylie
020 7520 5926 / 020 7520 5905
email@example.com / firstname.lastname@example.org
Notes to Editors:
1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of over £235 billion, 19% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 34% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
2. Photographs of Paul Broadhead are available from the BSA press office, or from the Association's website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk