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London Property News: CML hits out at FSA UK mortgage lending proposals

By: Paramount-Magazine  Published Date: 05 Oct 2010 18:10
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Figures released by the Council of Mortgage Lenders (CML) have calculated that almost four million homeowners would have been refused mortgages if stringent rules on UK mortgage lending had been brought in as proposed by the Financial Services Authority (FSA).

Economists at CML said the FSA's calls to impose severe financial checks on mortgage applicants would have a damaging effect on the housing market, both in times of high and low activity.

This would result in "an unintended obstacle to housing market recovery," CML remarked.

The organisation also pointed out that the FSA proposals would disproportionally affect first time property buyers and borrowers with impaired credit history - "these findings will have specific implications for mortgage and housing market dynamics," it added.

A response by the FSA explained that it is a result of lenders' past practices that 16 per cent of mortgage borrowers are already financially overstretched and said it is "imperative" to take steps to protect vulnerable consumers.
 

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