The Last Word
MMR capital rules will hurt bridging
The MMR consultation on bridging closed on the 30th March 2012. What do you want to see the FSA change in its final paper having now submitted your responses?
Adrian Bloomfield, chief executive, ASTL
The ASTL largely agrees with the Mortgage Market Review
proposals in particular bridging loans being defined as being of 12 months or less, interest-only being acceptable with an appropriate exit, there being no requirement to assess affordability where no monthly payments are due and exit is via a sale, and the proposed high net worth exemption. However we have a few areas of concern: our key concern is around the complexity and cost implications of complying with the proposed capital adequacy regime. The BIPRU rules are highly complex and not suited to small short-term lenders. The ASTL has made representation for a simpler requirement that firms can understand and comply
34 BRIDGING INTRODUCER MAY 2012
with. We do not agree that lenders should detail how they incorporate anti-fraud controls into their affordability assessments as there is a danger that requests for copies of a lender’s responsible lending policy would mean an exposure of information about use of anti- fraud controls which could then be used to circumvent the system. We are concerned about the requirement for an audit, which would be a costly process for small
“We have some concerns over the lack of definition of credit repair which would catch even those with minimal issues”
firms that do not have an internal audit department. A review based on internal statistics should be sufficient for small firms. We also do not agree that the requirement for evidence of income should be applied in all cases, as exits via sale where interest is rolled up or retained, do not require evidence of income to be obtained. Finally we have some concerns over the lack of definition of credit repair which would catch even those with minimal issues where a bridge and mainstream refinance would work. Guaranteed offers of exit are not a realistic option.
Nick Sneddon, associate director, Glenmore Capital
The MMR
proposals must centre round the protection of the customer without
turning the process into a logjam of redtape nullifying the main
www.mortgageintroducer.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40