FSA calls for sustainability in mortgage lending

Date:Monday 19th October 2009
Author: Susanna Kavka

The Financial Services Authority (FSA) has said that it wants to ensure that mortgage lending is sustainable and avoids unnecessary risk.

Jon Pain, managing director of the organisation, made his comments following the publication of the mortgage market review discussion paper.

In the report, a series of proposals are set out which will increase regulation within the sector and place greater emphasis on the individual's ability to afford their monthly repayments.

Mr Pain claimed that the aim is to restrict high-risk lending strategies and deal with issues with the availability of credit, as well as introduce more caution into the industry.

"The reforms that we have announced today will ensure that the mortgage market works better for consumers and that it is sustainable for firms," he said.

Last week, the FSA contacted 5,000 firms about regulations relating to the recruitment of senior employees and the importance of having due diligence procedures in place.