The Fsa Really Wind Me Up

[crown]

Listening to them yesterday, you would think they had no idea that lenders were lending too much and not checking incomes etc.

I blogged on this last year here

http://thecrownblogspot.blogspot.com/2008/...h-in-march.html

the key link is here

http://www.frb.co.uk/cgi-bin/dmr5?access=&...ent=2000_03_019

The chairman of the FSA in March 2000 warning the mortgage industry on lending too much to people with too few checks.

As always they knew about the problem, but did NOTHING. It's New Labour all over - all talk and no action.

[Timm]

The chairman of the FSA in March 2000 warning the mortgage industry on lending too much to people with too few checks.

As always they knew about the problem, but did NOTHING. It's New Labour all over - all talk and no action.

I thought they didn't have the power to actually do anything until 2004?

By which time the lunatics had stolen the ambulance.

[Bloo Loo]

The survey showed signs that upper range normal income multiples are moving from between 3 and 3.25 times prime income towards 3.5 to 3.75 times prime income. And at the same time we have seen significant volumes of high loan to valuation lending on the books. In 1998 12% of all loans by established lenders in our survey were at loan to valuation rates of between 95 and 100%. Even with house price inflation of 10% a year it would take 5 years for a 95% LTV loan to become a low risk credit.

so there it is from the Industry watchdogs, 3.5-3.75 times PRIME income.

now just add in the ever so slightly overegged the income applications and we have it.

[crown]

I thought they didn't have the power to actually do anything until 2004?

By which time the lunatics had stolen the ambulance.

Yes the FSA gained the powers in 2004. This report is of a speech to the mortgage industry warning them that the FSA would be taking over the regulation and they should get their house in order.

Addressing the Council of Mortgage Lenders at its annual lunch, Howard Davies, Chairman of the FSA warned mortgage lenders not to allow 'the hard learned lessons of the last recession to recede from corporate memories'.