FSA fast-track mortgage proposal 'completely illogical'

Monday, 12, Jul 2010 10:00

Proposals put forward by the Financial Services Authority (FSA) to ban fast-track mortgages are "completely illogical".

This is the view of Ray Boulger, senior technical manager independent mortgage adviser John Charcol, who claims that the market has already adjusted following the pre-credit crunch excesses.

The point is illustrated by the fact that lenders have tightened their own selection criteria - in many cases they are now more stringent than those recommended by the FSA, Mr Boulger claims.

"One of the interesting facts in the FSA paper is they admit that the performance of fast track mortgages - both in terms of arrears and repossessions - is better than the performance of non-fast track mortgages," he explained.

Therefore, any plan to ban fast-track mortgages is a completely illogical move, Mr Boulger concludes.

One of the other proposals put forward by the FSA includes imposing affordability tests for all mortgages, thus making lenders ultimately responsible for assessing a consumer's ability to pay.