MMR: IMLA welcomes latest FSA proposals

The trade body said the latest paper showed many positive signs of the FSA listening and responding to the mortgage industry crediting its common sense approach.

Peter Williams, executive director of IMLA, said: “It has clarified many issues such as those around affordability and advice.

“The new regime is not due until 2013 and there is the issue of transitional treatments but we have another round of consultation and a longish lead time to implementation to deal with this.

“We hope the momentum built up and the approach adopted by the FSA is not lost as we move towards the new arrangements for regulation.

“Of more immediate concern for IMLA, as we work through the proposals, are questions around the boundaries of some of these issues i.e. what is reasonable, who should be included and who might be defined as vulnerable.”

Williams added that IMLA also noted that the proposals would have a rolling impact as the market strengthened.

He said: “In that regard, I see the proposals as modestly reducing who can get mortgages now and when the market picks up these belts tighten further.

“It is clear this will impact most heavily on non-prime with a major contraction of what that market might do if the market overall becomes more buoyant.

“Although the proposals might suggest fewer arrears and repossession cases going forward, it does seem that options for those in difficulty will narrow and this might change the balance between arrears and repossession cases as we move into a downturn.”