FSA to consider "Gold Standard" Mortgages

Grovelawn Financial News 21/07/2008

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Temporary measures looked at to help market

The Council of Mortgages have released recent figures showing a fall of over 30 per cent on mortgage lending during June which is traditionaly a busy month for mortgages.

The CML have published their proposals to help the mortgage market on the way to recovery pointing out that lenders' funding shortages was a major factor in the slow recovery of the mortgage market and suggested that the Bank of England should offer loans in exchange for new mortgage- backed securities (MBS).

The Treasury has since announced its intention to take a further look at the options and has commissioned the deputy chairman of the FSA to look at the MBS situation which has resulted in the possibility of 'Gold Standard" Mortgages as a way of making these assets far more attractive to investors. The Bank of England agreed to swap mortgage securities earlier this year for Treasury Bills and accepting newer mortgages issued since the credit crunch is now an option being considered albeit as a short term one.

← Lenders rates are lowered | News For July 2008 | Rental yields rise →

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