The U.K.'s Council of Mortgage Lenders weighed in on the U.K. Treasury's plans to extend the Financial Services Authority's oversight of the industry in certain ways with what it characterized as a "mixed" response to the proposals.
The CML said it is supportive of the plan to regulate second-lien mortgages as it has been pushing for regulation of all secured lending, not just first-lien product, since before FSA mortgage regulation was introduced in 2004.
The group said it "broadly" supports the principle behind extending regulation to sales of mortgage portfolios to third parties when they are sold by originators, but asks regulators to strive to avoid negative consequences to the industry in implementing the move and notes that "there are bound to be issues to be ironed out in this area."
It said it is "more agnostic" about a plan to regulate investor properties, noting that it is unsure "whether the Treasury's main rationale for the proposed extension is related to market risk or consumer protection." If consumer protection is the aim, the CML said it believes "regulating the mortgage process — as opposed to the same process — will not necessarily address this."
