Many firms 'waiting for FSA authorisation'
20 August 2010 at 15:51
Many sale and rent back firms are still awaiting Financial Services Authority (FSA) authorisation as they secure interim regulation but decide not to pursue the whole standard, it has been claimed.
Vicky Hartley, writing for Mortgage Solution, noted that there have only been nine sale and rent back authorisations since July 1st when the sector became full regulated, and only one in the last five weeks.
She suggested that this is due to companies not seeking full authorisation or needing help to do so.
"50 firms sought interim regulation but many fell away, deciding not to seek full authorisation. Sources suggest at least 12 companies are still sitting in the wings, unable to trade and passing business on to regulated firms, with some reportedly financially struggling," Ms Hartley stated.
It comes after data issued by Moneyfacts revealed that the all-time low cost of swap rate funding has led to the margin between mortgage rates and the cost of funding to lenders through the swap rate market reaching a record high.
Posted by Tony Miller