Loud & Clear
It took its time but the final consultation paper for the Mortgage Market Review came as an early Christmas present for the industry.
The Financial Services Authority worked flat out to ensure mortgage brokers didn’t have to eat their turkey and sprouts without the mammoth paper beside them.
Speaking at the Mortgage Business Expo in November, Sheila Nicoll, director of conduct policy at the FSA, warned brokers to expect a huge doorstop of a document to arrive - and in this respect it did not disappoint.
But compared to the backlash over the last MMR consultation paper, published in the summer of 2010, it was a positively festive document with glad tidings for the industry.
The FSA had toned down some of its more contentious proposals to effectively ban interest-only and fast-track while retaining core principles of stricter affordability checks and income verification.
But the real surprise was the ban on non-advised mortgage sales, which the broker market hailed as a victory for the role of advice.
Vicki Prokes proceeded to refinance the home several times, the transactions reflecting all the pitfalls of the ongoing mortgage crisis. Each time, appraisers and lenders helped her secure loans she couldn't possibly afford.
In any given month, Modesto, Stockton and Merced are in the nation's top ten highest foreclosure rates and three out of five homeowners are “under water,” owing more on their home loans than their houses are worth.