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FSA outlines new suitable tests for mortgages
The Financial Services Authority (FSA) has unveiled proposals to ensure all borrowers can afford the mortgages given to them.
Published in a consultation paper, the organisation's measures call for the introduction of affordability tests on all mortgages, as well as new levels of verification to prevent cases linked to the inflation of income.
Another proposal hints at the launch of extra protection for vulnerable customers with a credit-impaired history.
Lesley Titcomb, FSA director responsible for the mortgage market, said the organisation is determined to ensure the most vulnerable customers can take on a mortgage that they are able to pay back.
She added: "We need to build a strong new framework to protect mortgage customers and to ensure that the problems we have seen in the past do not happen again, particularly as the mortgage market recovers."
The FSA recently also revealed new measures to help those in arrears on their mortgages, as well as those who enter sale and rent back agreements.