More Support For Secured Loan Regulation
Following the plans announced by HM Treasury to widen the regulation which is controlled by the Financial Services Authority (FSA) under its proposed Mortgage Market Review (MMR), there has been a mixed reaction from various experts in the financial services industry, particularly in the secured loans and mortgage sectors.
Whilst many industry experts and trade groups are unsure of the benefits of applying regulation to buy to let loans and placing a complete ban on self certification loans, the proposal that secured loans, or second charge loans, should be regulated in the same way as mortgages and first charge home owner loans has been widely welcomed by the industry as a whole.
This week, the Association of Finance Brokers (AFB) has also added its support to the proposals for regulating secured loans, saying that it has been campaigning for this course of action for some time. Although the AFB welcomes the proposed regulation, it feels that the way in which secured loans will be regulated, under the FSA’s Mortgage code of conduct regulations, rather than through the current structure, may cause complications whilst those working in the secured loan sector are forced to adapt their sales process to comply with the changes.
Robert Sinclair of the AFB said “We called for this change in our white paper, published in March this year, after a detailed consultation with the industry on the future of regulation. We fully support this announcement as we have long been calling for an alternative regulatory regime under the FSA. In our view, this will benefit intermediaries, lenders and consumers. We welcome the fact that the government and the regulators have listened to the intermediary industry in seeking to deliver a better environment for business and consumers.”
