This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8313853.stm

The article has changed 16 times. There is an RSS feed of changes available.

Version 0 Version 1
Mortgage affordability test plan Mortgage affordability test plan
(10 minutes later)
Borrowers face a mortgage affordability test from lenders amid plans by the Financial Services Authority to step up the regulation of home loans. Borrowers face a mortgage affordability test from lenders amid plans by the Financial Services Authority (FSA) to step up the regulation of home loans.
Self-certification mortgages will be banned under the proposals with lenders required to verify borrowers' incomes.Self-certification mortgages will be banned under the proposals with lenders required to verify borrowers' incomes.
FSA chief executive Hector Sants said that some people who got home loans in the boom would no longer be able to do so under the proposed new rules. FSA chief executive Hector Sants said that some people who were able to get home loans in the boom would no longer be able to under the proposed rules.
The industry will have until 30 January 2010 to comment on the plans.The industry will have until 30 January 2010 to comment on the plans.
The FSA, in its mortgage market review, has outlined a series of proposals for increasing regulation in the mortgage market.
However, it drew back from any ban on 100% mortgages, or any limit on loan-to-value levels. The was also no ban on loans over a certain multiple of borrowers' incomes.
The plans, which the FSA described as more "intrusive and interventionist", include:
  • Making lenders ultimately responsible for assessing consumers' ability to pay
  • Banning the sale of "toxic combination" loans, such as a high loan-to-value loan for somebody with a poor credit history
  • Stopping arrears charges for borrowers who have got behind on payments, but are paying
  • Extending policing of the industry by the FSA to all mortgage advisers and arrangers.
"We need a new approach to regulation," Mr Sants told the BBC.
He said that the irresponsibility of the past that put firms and consumers at risk should not be repeated.