The U.K.’s financial regulator outlined plans to revamp the mortgage market, saying it wants to boost transparency during the mortgage-sale process and improve the disclosure of information for consumers.
All individuals who sell mortgages will have to hold a “qualification” and companies must disclose to customers whether they get any commission for the sale of the product, the Financial Services Authority in London said today.
Britain’s financial watchdog is overhauling the mortgage market and published a report in July proposing stricter tests for borrowers to ensure they have sufficient money to repay their loans if interest rates rise and house prices decline.
“This next step of the mortgage market review recognizes the importance of the intermediary and ensuring the quality of every mortgage sale,” Sheila Nicoll, the FSA’s director of conduct policy, said in the statement. “It also indicates how the intermediary and other sales staff fit into our vision of a sustainable mortgage market that works well for consumers.”
Housing industry lobbies criticized the FSA’s proposals as too restrictive. In a letter to Chancellor of the Exchequer George Osborne today, representatives of the housing-market industry said the planned changes would have a “potentially significant impact” and restrict access to home ownership.
“Lenders should, of course, be required to lend responsibly,” said co-signatories of the letter including Stewart Baseley, executive chairman of the Home Builders Federation, and David Orr, chief executive of the National Housing Federation. “But the onerous and overly prescriptive proposals will restrict access to home ownership and have far- reaching implications.”
The FSA said the consultation is open until Feb. 25.
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