The final Mortgage Market Review paper due out some time before the year end is understood to have done as extensive cost benefit analysis on existing mortgage borrowers who will be unable to remortgage as a result of proposed FSA regulation.
Speaking to Mortgage Introducer at a roundtable David Geale, mortgage sector manager at the FSA, said: “Mortgage prisoners are the people who have potentially taken loans which are no longer affordable under tightened lending criteria.
“It’s not because of what we’ve done as the MMR hasn’t come in yet but lenders’ criteria has tightened up so it’s a reality now.
“It’s obviously something we’ve considered very carefully when we’re coming to the final proposals. A part of it will be how we deal with things in exactly that sort of situation.
“Of course the final consultation paper is not out yet so I can’t go too far with that but we are saying that we are very much aware of that and it will form part of our cost-benefit decisions.”
Geale also revealed the FSA’s stance on fast-track mortgages may now see the product preserved but in a more strictly documented format. This could involve income verification.
He added: “We have looked at fast-track in the MMR and there’s fast-track and there’s fast-track. We’re not saying that people can’t do things quicker but there must be some basics that should be done in all cases.”
Geale also said individual registration was high on the FSA’s radar.
“We are well aware of how important the individual registrations for approved persons are,” he said. “We’re continuing to prioritise our work as best we can and it is still on our agenda.”
He added that the FSA planned to implement individual registration “as soon as we possibly can” but wouldn’t give a time frame.
