The Financial Services Authority (FSA) have announced plans to ban self certified home loans in a bid to limit the amount of mortgage lending.

The FSA is said to be “adamant” that it will impose new rules that will ban mortgage lending without proof of income or so-called ‘self-certified’ loans.

The UK financial watchdog has said it wants to bring in the new restrictions to ensure that lenders are only giving home loans to those who can afford to repay it. It insists that this can only be done with prior knowledge of a borrowers financial situation, which will effectively put an end to self-cert mortgages.

Self-certified loans mean that home loans are given out on the basis of the borrowers statement of their income, but they do not currently need to provide any proof of this. In the

Read more…

A new government campaign has launched, aiming to cap the interest rates on regulated loans that can charge up to 2,500% annual interest.

Ministers are said to be considering capping the interest rates on loans, similar to the commitment they have made to reducing the interest rates on store cards and credit cards.

The new campaign is being led by Compass and has gathered support from church groups, debt advice and campaign groups, including Citizens UK.

The group said: “Lenders can charge any price for credit, which means some companies charge £82 for every £100 lent. Annual interest rate charges of over 2,500% are also now common. B

Read more…