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UK mortgage regulation - Proposals for change


The proposals referred to in the CP follow on from the preliminary proposals announced by the Government in July 2009 and from the discussion paper (DP) published by the UK Financial Services Authority (FSA) in October 2009.

While the CP is fairly focused in its scope - making specific proposals with respect to the regulation of second mortgages, buy to let mortgages and entities which purchase mortgage books - the DP refers to these topics and goes beyond to include proposals related to a much wider range of mortgage regulation-related topics. This range is in keeping with the FSA's apparent intention to adjust its approach in general to mortgage regulation. In this regard, the DP indicates that the FSA recognises that its earlier approach, particularly its heavy reliance upon disclosure, has failed in relation to certain segments of the market and that in very broad terms consumers are not to be trusted to act in their own best interests.

Given the significance of the issues under discussion (and corresponding cost implications), participants in the consumer mortgage market will want to focus on the proposed changes referred to in each of the CP and the DP. We note that the discussion period in respect of the matters raised in the DP ends on 30 January 2010 and the consultation period for the CP ends on 15 February 2010.

Further information

For further information on the proposals, please contact any of the key contacts listed above and/or your usual contact at Allen & Overy.




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