AMI is concerned that existing and future mortgage borrowers could be unnecessarily excluded from access to finance.
Robert Sinclair, AMI director, said: "We need to protect consumers, but we must ensure they are able to buy their own home when they can afford to do so. Any regulation needs to be both effective and proportionate.
“The regulation of individual mortgage products is not the way to address perceived problems in the mortgage market. We therefore support the decision of the regulator not to apply restrictions to Loan-To-Value ratios.
”The regulator is right to address certain aspects of the self-certification model. However, this product is necessary for some consumers, such as those who may have fluctuating or seasonal income. The regulator would be better served by introducing more stringent measures on those lenders operating in this area of the market as they begin to lend again, rather than penalising all consumers. We are concerned about the impact on lenders' costs and therefore the cost of borrowing on those who benefited from fast-track in the past. These were consumers with good credit history who were deemed low risk by lenders, often with lower Loan-To-Value ratios.
”We are concerned with proposals to introduce stringent criteria for lending that may significantly increase the cost of borrowing for ordinary, responsible consumers. While we must ensure lending is responsible we should not remove all responsibility from consumers. Similarly, in transferring all liability to lenders, we need to ensure that this does not unduly restrict existing borrowers from having access to the full market. We do not want to create mortgage prisoners.
”It may be necessary to consider segmenting the purchase from the remortgage market. There will have to be careful interpretation of the testing of income so as not to discriminate against some sections of society.
“Mortgage intermediaries play a vital role in advising consumers about what is affordable and what the best product is to meet their needs. We fully support measures to ensure all mortgage advisers and arrangers, including intermediaries, are registered individually with the regulator. The regulator is also right to ensure full disclosure from all those dealing with consumers. This must apply equally to independent mortgage intermediaries as to those who work directly for banks and other financial institutions.”
