Mortgage Lenders Criticised for Poor Advice

A study by the FSA has revealed that 25% of mortgage lenders are giving poor advice.

In particular the FSA was critical of self certification mortgage lenders. Quite a few were willing to proceed with lending despite the uncertainty of the income for borrowers.

10 of these (mainly) self-certification lenders now face sanctions from the FSA. These sanctions could include a ban on trading until the relevant criteria are met. Another 65 companies are being considered for possible referral

The FSA were keen to point out that the majority of lenders were sticking to agreed FSA rules about borrowing and advice for lenders. The surveys were taken out between June and September of this year. Since their review the issue of unconventional mortgages has gained greater importance due to the sub prime crisis in America.

The council of Mortgage Lenders welcome the FSA review, although they requested that the FSA should be clear about all the rules.

Regulators criticised by FSA