The current mortgage repayment difficulties and numbers of people losing their houses may be less now than early in the 1990s, the head of the Financial Services Authority (FSA) ? Lord Turner ? has announced, according to a report on BBC News.
Lord Turner has advised that the low interest rates have helped boost the immediate financial situation for many mortgage borrowers. Despite the problems people are facing in the current economic downturn, the low rates are helping people to meet their mortgage repayments ? a more positive outlook than faced those in the early 1990s recession.
However, Lord Turner also added that the FSA still needs to decide about the future of mortgage regulations. This includes the size of mortgages and whether this should be comparable to the price and worth of the individual property or the home owner?s earnings.
The FSA, on the back of a report earlier in 2009 on the mortgage market, is also considering placing a restriction on lenders in terms on how much they can lend and whether the variety of mortgages needs to be limited.
During a speech to a mortgage industry conference in London, Lord Turner said: ?We are not yet able to make even initial proposals for regulation.? He apparently explained that this was because of a need ?to get it right?.
The FSA is due to release a formal paper on mortgage regulation in September of this year.
Lord Turner did, however, face differing views during the conference. Many voiced an opinion that mistakes were being made currently but more regulations were not necessarily the answer. For example, Peter Vicary-Smith, of the consumers? association Which?, said: ?I am not convinced that blanket restrictions on income multiples are desirable as they could lead to a further crash in house prices.?
