Friday, 4 October 2013

"Mortgage lenders face tougher rules"

From the BBC:

The UK's mortgage lenders have been warned that tougher regulation is on its way, to protect consumers.

The Financial Conduct Authority (FCA) has proposed that all borrowers should have an "affordability" check before being given a mortgage. Among other new rules, the FCA wants to put risk warnings on adverts and marketing material.

The Council of Mortgage Lenders gave the plans a guarded welcome, saying irresponsible lenders would struggle to comply.

Martin Wheatley, the FCA's chief executive, said: "Today I'm putting banks and building societies on notice: tougher regulation is coming and I expect them all to make changes so that consumers get a fair outcome. The clock is ticking."

The proposals mean that anyone taking out a home loan would need to prove that they could afford to repay it. In a separate government survey, one in five customers said they were not even asked about their finances when they applied for a mortgage.


Lola said...

I hate to rain on your parade, but 'affordability checks' are already compulsory for mortgage lending. Trouble is of course the checks are pants. The lenders have abandoned the old 3 x first plus once x second income and have moved to 'affordability', which, guess what can result in multiples of over 5 x first income. So that worked well, not.

More failed regulation.