D Day for us all

It has already been rumoured that self-cert mortgages will be banned but the regulator is definitely expected to come down hard on lenders who are found to be irresponsible.

The FSA’s main priority is to make sure that mortgages will only be given to those who can afford them. Lenders who do not follow this rule could become liable for the loan.

There has been much speculation about traditional loans-to-value being replaced, possibly by loans-to-income. But, speaking yesterday to the BBC, Lord Myners said that there would be no specific limits placed on the amount of money an individual could borrow relative to either of these. Instead, lenders must be able to justify the loan.

In a webcast on the Downing Street website, Gordon Brown said: “Never again should banks and credit card companies encourage you to borrow more than you can realistically afford to repay. I believe lenders should have to carry out proper checks on incomes before agreeing home loans.

"And to protect homebuyers further, we need much tougher rules to make sure that high loan-to-value or high loan-to-income mortgages are offered only when the lender has done rigorous checks to ensure people can keep up repayments."

Keep checking with Mortgage Introducer for all the latest news on the review and reactions from the industry.