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Working group to take on mortgage issues
14 April 2008 10:30
A working group has been established to resolve the current shortage of mortgage finance available to borrowers and to provide the market with some long-term security.
In response to current disruption to financial markets and the dearth of long-term fixed-rates, the government has set up a group representing lenders, investors, the Treasury, the Bank of England (BoE) and the Financial Services Authority to confront these issues.
The working group's twin aims are to widen the investor base for mortgage finance and to enhance the mortgage-backed securities market as a source of lender funding and its first task will be to carry out a broad assessment of the mortgage finance market.
Chancellor Alistair Darling explained that present uncertainties in global money markets have highlighted challenges to mortgage funding and that this new group would therefore play a key role in stabilising the cost and supply of mortgages in Britain.
However, while Michael Coogan from the Council of Mortgage Lenders welcomed the group's creation, he warned that it would not be able to restore confidence to the sector immediately and urged the BoE to take action to counter market-funding problems now.
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