Housing, mortgages and the FSA


It struck me as I woke – ! – how hopeless is the FSA’s regulation of the mortgage lending industry? Now, every time you buy something which could potentially involve credit, whether or not you take it, you have to listen to, or read, some pointless blurb about that firm’s regulation by the FSA. It just bores everyone.

On the other hand, in a market that has been pumped by interested parties, in which many economists agree there should already have been a crash, in which the FSA has warned participants must prepare themselves to survive a 40% drop in prices, mortgage lending firms can get away with offering 5 or 7 times salary on a mortgage that lasts 40 years and may involve profit sharing on the capital appreciation. When did that become a good idea?

I would like to believe the FSA is constrained by the law, and that otherwise they would act to impose limits on mortgage lending to protect people from greedy and foolish lending. If that were the case, we could blame Labour and consistency would be satisfied.

It’ll end in tears.

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