CML Opposes the New Regulations of the Mortgage Market

Mr. Matthew Wyles, chairman of the Council of Mortgage Lenders – the UK regulator in the sector of residential, buy to let, and other types mortgages – accused lenders of acting like “drug dealers at the school gates”, as they hook innocent borrowers for lenders’ profit-driven purposes.
He also reacted extremely negatively to the new regulations of the mortgage industry, proposed by the Financial Services Authority, as in the opinion of Mr. Wyles, the new rules might totally ruin the mortgage market as they are highly likely to result in additional delays and costs to mortgage applicants, thus frustrating borrowers who are already struggling with interest rates and tight lending criteria.
It is expected that the statement of Mr. Wyles will influence the behavior of UK lenders, as the Council of Mortgage Lenders, to which Mr. Wyles is chairman, represents as much as 98% of all British mortgage lenders. However, the battle is expected in the near future as the Financial Services Authority is unlikely to revert from its plans associated with the introduction of tighter regulation in the mortgage sector.
Commenting on the situation during the CML conference, Mr. Wyles said he is concerned that the FSA is trying to push through too much of political influence.
In his opinion, the mortgage market should be in perfect balance as, according to CML researches, the majority of borrowers want just what the majority of UK lenders want. These include easy access to funds, affordability of mortgages (low interest rates and flexible terms), and adequate regulation of the sector. According to Mr. Wyles, the British mortgage market was just like that 10 years before the beginning of the economic downturn. Since that time, the mortgage industry started its movement downward the spiral, and the new FSA regulations might result in total destruction of the mortgage system as many “good” borrowers will be outlawed.
Mr. Wyles urged the Financial Services Authority to re-examine its proposals and the possible consequences of their introduction once again before putting the regulations into force.