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Regulatory developments in the mortgage sector
01 September 2010
As part of its Mortgage Market Review the Financial Services Authority (FSA) published Policy Statement 10/9 on Arrears and Approved Persons (PS10/09) and Consultation Paper 10/16 on Responsible Lending (CP10/16).
In addition, on 22 July 2010, the European Commission produced a working paper on responsible lending and borrowing in the mortgage sector.
PS 10/9 sets out the FSA’s near final rules and guidance regarding the changes to arrears rules in the Mortgages and Home Finance: Conduct of Business sourcebook (MCOB) and its proposals to extend the approved persons regime so it applies to those individuals advising on, arranging or entering home finance business.
Following the FSA’s recent statements that it is to adopt a more interventionist approach to regulating firms and markets, CP10/16 sets out proposals aimed at developing a sustainable and flexible mortgage market that works better for consumers.
In particular CP 10/16 considers new rules relating to affordability assessments, arrears charges, the regulation of non-bank mortgage lenders and interest-only mortgages.
The EU Commission has also announced its intention to publish a draft legislative proposal for a directive on responsible lending and borrowing in the field of mortgage credit at the end of November 2010.
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