Having launched a review into arrangement and exit fees, the regulator admitted it was to widen its attention to judge affordability and its risks over the life of the mortgage.
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Speaking at the Council of Mortgage Lenders Northern Ireland Annual Lunch, Vernon Everitt, director of retail themes at the FSA, said: “We are interested to see whether firms consider affordability throughout the term of the mortgage, taking into account any reasonably anticipated changes.
“We want to make sure that consumers are not being offered non-conforming rates when they could be eligible for much better prime rates. We’re taking an overview and considering whether the mortgage regime is delivering the intended outcomes for consumers.”
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A broker, who wished to remain anonymous, said: “It seems like a great idea, but would be almost impossible to implement. The FSA needs to look at other areas. ‘Treating Customers Fairly’ is still a muddle and the ideas for judging affordability over the lifetime of the mortgage would be impossible to test, because of the borrower’s changing circumstances.”
In the speech Everitt also confirmed that the issue of debt would remain a central theme, in relation to the non-conforming sector.
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