FSA experiences opposition to 100% mortgage ban
The FSA (Financial Services Authority) has today experienced a significant backlash from the financial community amid calls to ban 100% mortgages and also force mortgage companies to investigate self certified mortgages, to ensure income is there to support the loans. While there is no doubt that 100% mortgages have played a significant role in the downturn of the UK property market, they have also played a significant role in the upturn we have seen over the last decade.
Finance companies are also very concerned about the unjust focus upon the self-employed market and the very fact that those who apply for self-certified mortgages, where proof of income is not required, are often unable to demonstrate long-term income streams due to the very nature of their businesses. There is a feeling that the self-employed are being discriminated against purely and simply because of the position they are in and the fact they may not have a long-term income trail to support a mortgage arrangement, even if their short-term income is more than adequate.
There is no doubt there will be continued friction between the FSA and the financial community with regards to future regulations. The very fact that mortgages such as the two described above have been available for many years, in the boom times and the bust times of the property market, shows that there is a place for them although whether further investigation regarding income streams for the self-employed is sensible, is a very potent question.
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