UK regulator to dilute mortgage loans rules

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The United Kingdom Financial Watchdog has announced the plans to irrigate its rules on mortgage loans to make it faster and cheaper for people to get home loans, despite consumption groups that warn of erroneous sales risks.

British lenders will be released from providing formal advice or complete accessibility assessments when organized mortgage Wednesday for many clients, under the plans described by the Financial Conduct Authority.

“We want it to be easier, faster and cheaper than the borrowers to make changes to their mortgage,” said Emad Aladhal, director of Banca Retista de la FCA, in a speech.

The regulator he said Also noteworthy is the guidelines for lenders to treat mortgages only of interest and to tell customers what support is available when they increase their interest rates. He said that they had achieved their goals and did not provide much benefit.

The plans, which will move away from the rules designed to prevent a future financial crisis, are part of the FCA response to the call of Prime Minister Sir Keir Starmer so that the regulators focus on promoting economic growth.

“These proposals can allow larger lenders to innovate and develop their own approaches to good results, and to do it, the borrowers to make the right decisions for their mortgage,” said Aladhal.

The banks hosted the announcement. “Proposals should be beneficial to those who want to remute or reduce their mortgage,” said Charles Roe, director of the mortgage of the United Kingdom’s financial trade body. “Changes will help to promote the government’s growth agenda in a way that benefits our members and mortgages.”

However, there are fears that the regulator will be diluting consumer protections. “The FCA will have to see the market very carefully after these rules come into force to make sure they do not lead the return to the age of erroneous sale or catalyze a new era of mistaken,” said James Daley, head of the Fairer Finance Consumer Group.

According to proposals, lenders could make a lighter evaluation of a client’s accessibility when they were backed up at a cheaper rate than their existing lender.

Last year, 83 percent of the people who rumbled stayed with their existing lender, and the FCA said that this reflected “various barriers or transaction costs, both in time and in money” when they were looking for a mortgage from a different supplier.

The lenders would be released from having to evaluate complete accessibility when customers reduce the term of their mortgage. The FCA said that 41 percent of the new mortgages last year spread beyond the age of the 67 -year -old state pension and reduce the term would reduce the risk of reimbursement problems “later in life”.

The regulator also said that it was also intended to provide customers to organize a mortgage without having to go through the formal process of receiving regulated tips, which includes the check of the lender if a home loan is appropriate.

In the last two decades, 97 percent of customers who receive a new mortgage have received regulated advice from their provider. This is about 70 percent before the FCA introduced strictest requirements in 2014 in response to the 2008 financial crisis.

The FCA said that its 2014 rule had been “more than planned” the ability of consumers to opt for advice when they knew the precise domestic loan they wanted and trusted not to need the additional protection of having an evaluated suitability.

Their rules would not change for higher risk customers, such as those who consolidate the debt, exercising a “right to buy” legal of their home, with shared capital arrangements or in life mortgages.

The regulator said he was able to dilute some requirements since he introduced the consumer service rules for two years that they require companies to ensure that customers do good results. But he said that there was a risk that their proposals could mean that people “are more likely to choose an inappropriate or more expensive product.”

Companies have until June 4 to respond to the consultation.