It looks like the MMR framework will be published by the regulator in Autumn this year with implementation to happen in 2012.
FSA chief executive Hector Sants "The MMR is still at the stage of analysis. I am sure we all recognise the market place did not function well in the decade prior to 2007. Credit expanded by 200%, but there was no consequent rise in the percentage of homeownership, nor was there an increase in first time buying.
"We do, however, recognise the sensitivity of the interaction between our actions and the public policy agenda."
"Our goal will be to reduce the possibility of consumer detriment in relation to affordability occurring without impacting the ability of the market place to offer affordable mortgages," Sants said.
The Mortgage Industry has been concerned about the impact of the proposed regulation for some considerable time.
Satvinder Singh Business Development Director at Contractor Mortgages Made Easy stated that "it is good to see that the regulator is not looking to push through decisions."
"My thoughts regarding the MMR has always been it is a good thing, my concern was always will decisions be rushed through or will proper consultation take place. To be fair to the regulator they have invited the industry for feedback and changed some of their original thinking. Nobody likes change but it was inevitable and now that everyone is fully considering the impact on consumer detriment I'm confident all market participants will benefit from the resulting changes."
In the short term we have seen some lenders that offer contractor mortgages no longer willing to do as a consequence of what was proposed in the MMR but looking forward we hope that the landscape will change and lenders will revisit some of the decisions they have made recently.
With a number of positive signs in both the contractor and mortgage markets for 2011, many contractors will be looking to enter the property market again this year. It is highly recommend that any contractor who has a requirement for mortgage advice utilises the services of a specialist contractor mortgage broker. Someone who understands contractor work patterns and payment methodology, rather than a generic broker who is more likely to waste a client's time and money as a result of a failed mortgage application.