UK organizer to mitigate mortgage lending rules

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The UK Financial Supervision Authority has announced plans to reduce its rules on lending to mortgage to make them faster and cheaper for people to obtain home loans, although consumer groups warn of increasing sales risk.

British lenders will be free from having to provide formal advice or to make fully assessments. Real estate loans For many customers, according to the plans set by the Financial Conduct Authority on Wednesday.

“We want to make it easier, faster and cheaper for borrowers to make changes to their mortgage,” said Asr Alaa, director of retail banking services at FCA, in a letter.

Organizer He said It will also lead to the abolition of lenders on dealing with real estate loans of interest only, and to inform customers of the available support when interest rates rise. They said they have achieved their goals and did not provide much interest.

The plans, which will get rid of the rules designed to prevent the future financial crisis, are part of FCA’s response to Prime Minister Sir Kerr Starmer’s call to regulatory authorities to focus on enhancing economic growth.

“These proposals can allow lenders a greater range of innovation and develop their own methods to provide good results, and in doing so, enabling borrowers to make the right options to mortgage them,” Alaahaal said.

The banks welcomed this announcement. “The proposals should be useful for those looking to restore mortgage or reduce the mortgage period,” said Charles Roy, director of real estate loans at the United Kingdom. “The changes will help pay the government’s growth agenda in a way that benefits our members and their mortgage agents.”

However, there are fears that the organizer relieves consumer protection. “FCA will need to watch the market very carefully after these rules enter into force to ensure that no return to the era of poor sale or stimulate a new era of poor purchase,” said James Dali, head of the Consumer Group.

Under the proposals, lenders will be allowed to conduct an assessment of the ability to withstand a lighter weight for the customer when the mortgage is offered with a cheaper rate than the current lender.

Last year, 83 percent of the people who refunded them with their current lender remained, and FCA said this reflects “many barriers or transactions costs, in time and money” when searching for a mortgage of a different provider.

The lenders will be released from having to a full assessment of the ability to withstand costs when customers reduce their mortgage period. FCA said that 41 percent of the new real estate loans extended last year until after the 67 -year -old government retirement age and that reducing the term will reduce the risk of payment “later in life.”

The organizer said that it also aims to facilitate customers mortgage, without having to have to have the official process to receive organized advice, which includes verifying whether the home loan is appropriate.

In the past two decades, 97 percent of customers who are obtaining a new mortgage have received organized advice from their lender. This rises from about 70 percent before FCA provides stricter requirements in 2014 in response to the 2008 financial crisis.

FCA said its 2014 ruling may restrict “more than what is meant” the ability of consumers to cancel the advice when they knew the exact house loan they wanted and were confident not to need additional protection to assess the suitability.

Its bases of high risk customers, such as unifying debts, and “the right to buy” their house, will not change with joint stock arrangements or real estate mortgages for life.

The organizer said that he was able to reduce some of the requirements since submitting the rules of consumer duty two years ago that require companies to ensure that customers get good results. But she said that there is a risk that might mean that her suggestions may mean that people are “more likely to choose an inappropriate product or more expensive.”

I have companies until June 4 to respond to the advice.