The mortgage industry must consult internally on what lessons can be learned from the summer credit crunch, according to Jon Pain, chairman of the Council of Mortgage Lenders.
During a speech at the Council of Mortgage Lenders’ (CML) annual conference, Pain reflected on his two years as chairman, saying the industry had seen growth in lenders and products, along with the bedding down of regulation. However, he says recent problems will have a profound effect on the market.
Pain outlined three areas requiring urgent action to help the UK mortgage market. Firstly, he called on a swift resolution of the Northern Rock issue to restore consumer and market confidence.
Plain also called for the Bank of England to look at how it can help re-open the mortgage backed securities market in the UK to ease liquidity, which took a hit due to problems in the US sub-prime mortgage market,
Lastly, he says the industry must consider what lessons need to be learned from the credit crunch to prevent such an event happening again.
He says: “Lessons clearly have to be learned by all parties, including those of us managing businesses in the mortgage market, the regulators, the Treasury and the Bank of England. At the same time, we all – as stakeholders in our industry - need to stay focused on the needs of our 11.8 million mortgage customers.”
Michael Coogan, director general of the CML, called on both consumers and lenders to prepare for challenging times with higher borrowing costs and more arrears expected.
“We will carry on representing the industry's interests as effectively as possible, particularly in a heightened media, political and regulatory environment where the risk of over-reaction is real,” says Coogan.
“We will continue to highlight the valuable role the mortgage industry has fulfilled in the UK economy, the strength flowing from the diversity and breadth of size of lenders, and the benefits for consumers that lenders will continue to deliver in the future.”
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