Regulator and lenders in mortgage lending row
Published ¤ 05/11/2010 10:42:50
Mortgage lenders have called on the UK financial regulator to water down its plans to restrict mortgage lending.
The Council of Mortgage Lenders (CML) says the plans of the Financial Services Authority (FSA) are "flawed and impractical".
But the FSA said it was simply trying to drive out irresponsible lending.
It said borrowers needed to be protected from taking home loans they could not afford, which exposed them to being repossessed.
Negative, unintended outcomes
The row between the two organisations has been brewing since the autumn of 2009 when the FSA first proposed that self-certified lending should be banned.
Since July this year, the FSA has been consulting on a wider range of plans, which the CML is worried will severely, and unnecessarily, hinder any upturn in mortgage lending in the future.
The CML's director general Michael Coogan said he wanted the FSA to rewrite its draft rules.
Research commissioned by the CML showed "a wide range of evidence that suggests there would be a range of negative, unintended outcomes from the implementation of the FSA's policy and proposed rules as currently drafted," he said.
The FSA responded by accusing the mortgage lending industry in the past of being guilty of "major failures" including "risky lending" that had led to "unaffordable borrowing", particularly in the years leading up to the start of the credit crunch in 2007.
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