Good borrowers 'to be stung by mortgage regulation'

Date:Wednesday 21st October 2009
Author: Susanna Kavka

Good borrowers who happen to be in an unusual situation could find their mortgage options limited by new regulations imposed by the Financial Services Authority (FSA), an industry analyst has suggested.

Katie Tucker, technical manager at mortgageforce, made her comments following proposals by the FSA to make credit checks more stringent on mortgage applicants.

She pointed out that it is accepted that nobody wants banks to be as relaxed over lending conditions as they have been previously, but lenders themselves have taken steps to reduce risk anyway.

Ms Tucker explained: "Regulations can have their benefits, but not only is blanket regulation a very expensive and inefficient way to impose lending rules, it reduces the options available to good borrowers with genuinely unusual circumstances."

As the regulations will be phased into the system throughout 2010, many mortgage lenders are currently expecting a rush of applications before they come into place, she added.