Revisions to mortgage lending rules have been announced by the Financial Services Authority (FSA).
The regulator's Mortgage Market Review aims to deal with the trend of irresponsible lending which preceded the recent recession. The proposals are designed to ensure that buyers are given the information and advice they need and will force the mortgage lender to properly check each applicant's financial situation and ability to repay.
Many borrowers were left struggling to repay their mortgage and were put in danger of losing their homes due to poor advice in the past. By correctly assessing people's ability to repay on a realistic basis, the FSA hopes to be able to prevent a similar situation from reoccurring on such a widespread basis.
Lord Turner, chairman of the regulator, commented: “We believe that these are common sense proposals which serve the interests of both lenders and borrowers.
“While the excesses of the pre-crisis period have largely disappeared from the current market, it is important to ensure that better practice endures in future when memories of the crisis recede and the dangers of poor practice return.”
