The FSA’s Consultation Paper CP11/31 is entitled ‘Mortgage Market Review: Proposed package of reforms’. It was published in December 2011. Comments should reach the FSA by 30 March 2012.
The MMR paper states: “A bridging loan by its very nature relies on speed to complete the transaction as quickly as possible, so we need to strike a careful balance between maintaining it as a viable niche product (i.e. not creating an unnecessarily burdensome regime) and ensuring that lenders are lending responsibly.
“The expensive nature of bridging finance means that it should only be used where it is appropriate. This also makes it very important that intermediaries and lenders carry out careful checks to ensure that the consumer will ultimately be in a position to repay.”
The FSA has called on the industry to feed back on its proposals given that this is the first consultation on the sector conducted by the regulator.
Adrian Bloomfield, chief executive of the association of short term lenders, ASTL, said:
“ASTL recognise that the MMR is a most important topic for members, and will have an impact on regulated business. It is an extensive publication and currently we are reviewing it to identify the proposals that will affect the short term lending industry. In this task we are being advised by our compliance consultants and we will seek other
professional advice if and where appropriate.
We will be formulating our response to FSA which we will pass through our executive committee, and we will consult with our members. We will compile our co-ordinated views and deliver our response by the March deadline.”
The FSA summary document can be downloaded by clicking here
The FSA Mortgage Market Review: Proposed package of reforms consultancy paper can be downloaded by clicking here
The FSA Mortgage Market Review Data Pack can be downloaded by clicking here