- U.K. Financial Services Authority Issues Mortgage Proposals
- July 28, 2010
- Law Firm: Alston Bird LLP - Atlanta Office
Tuesday, the U.K.’s Financial Services Authority (FSA) released its mortgage rule proposals, with a goal “to ensure all mortgages are carefully assessed to make sure borrowers can afford them.” The FSA published its new proposals in a consultation paper, entitled “Mortgage Market Review: Responsible Lending.” The consultation paper includes additional analysis on “affordability assessments,” “product regulation,” “arrears charges” and other topics related to the mortgage industry.
According to the FSA, “some of the key proposals include:
• Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer's ability to pay;
• Requiring verification of borrowers' income in every case to prevent over inflation of income and to prevent mortgage fraud;
• Extra protection for vulnerable customers with a credit-impaired history.”
With respect to the proposals, FSA director Lesley Titcomb stated that “[t]here is a clear link between financial overstretch and mortgage arrears and repossessions, and we are determined to protect vulnerable consumers by making sure that everyone who takes on a mortgage can afford to pay it back.”
The FSA will accept responses to its consultation paper until November 16, 2010.