AMI: Treasury proposals will be difficult to implement

Proposals made by the UK Treasury to strengthen the protection of home loans will be difficult to apply, the Association of Mortgage Intermediaries (AMI) has said.

The proposals, announced earlier this week, will aim to protect borrowers when lenders sell on mortgage books to third parties.

Property owners will be safeguarded by the Financial Services Authority's regulations concerning treatment of customers under the new proposals.

However, as many policies have already been sold on, the regulation will difficult to apply, said AMI director Robert Sinclair.

"I'm not sure how this is going to work - in terms of the fact that most of these have already been sold on - and they will find it difficult to apply this retrospectively. But I clearly understand why they want to do this," he said.

The proposals also include extending the scope of FSA regulation to include second-charge mortgages and buy-to-let mortgages.

Despite difficulties in applying the proposed measures, Mr Sinclair said the overall proposals would provide more protection.

"The key for this is to provide more protection for borrowers, in terms of giving a more consistent regime that will allow things to be compared on a more level playing field," he added.

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