AFB demands action on second mortgage market
by Gill Montia

The Association of Finance Brokers (AFB) is lobbying the Government to better regulate the second and subsequent charge residential lending market.
Second charge loans, known as “homeowner loans”, involve consumers with existing mortgages taking out further personal borrowing, secured against their home.
A recent publication from the Office of Fair Trading proposes new guidance for the sector.
However, the AFB, which says it exists to present the views of its members to regulators and policy makers, is looking for a strong response.
The body is urging the Department for Business, Enterprise and Regulatory Reform to bring the sector under the regulatory regime of the Financial Services Authority (FSA), claiming that a consultation of its members last year showed overwhelming support for such a move.
AFB director, Robert Sinclair, believes the OFT’s latest proposed guidance could be replicated within the Mortgage Conduct of Business regime of the FSA.
Mr Sinclair adds that this would benefit intermediaries, lenders and consumers because it would “allow the impending implementation of the European Consumer Credit Directive to be limited to unsecured credit, while providing an alternative, robust regime for second charge lending”.
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Tags: AFB, Association of Finance Brokers, FSA regulation, lending, residential, second charge, secured
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