Which?: “Tougher measures” are needed for mortgage regulation

Consumer watchdog Which? has responded to the recently-announced decision by the Financial Services Authority (FSA) to more strongly regulate the mortgage market so as to improve services for debtors, saying that “tougher measures” would be welcomed.

Peter Vicary-Smith, chief executive of Which?, observed that although the body is pleased the FSA is opting to take “a more robust approach” in the supervision of the sector, protocol such as “the naming of lenders that mistreat their customers” and “a ban on mortgages over 100 per cent” would be beneficial.

He went on to add that, according to the FSA handbook, lenders are already responsible for affordability assessments, questioning why the FSA has suddenly decided to crack down on it now.

“Many borrowers are suffering the consequences of irresponsible lending,” he noted.

Managing director of supervision with the FSA Jon Pain remarked that the body’s proposed reforms were issued as a result of emerging high-risk lending that focused on less stable borrowers.

By Sarah Adie