Credit Crunch Hits Third Phase

If you are considering taking your CeFA or CeMAP training to enter the financial services industry as either a financial advisor or mortgage advisor, then no doubt you will have been following the news about the credit crunch crisis quite closely.

The Financial Services Authority’s (FSA) chief executive, Hector Sants, has said that now the credit crunch is entering the third and most difficult phase of the period.

Mr Sants was speaking at the FSA’s annual meeting and he said that the next phase of events, started by the sub-prime mortgage problems in America, to mean a downturn in the real economy.

He expects there will be more home repossessions as Brits struggle to keep up their mortgage repayments.

According to Mr Sants, the regulator will continue its stance to clamp down on mortgage advice companies and mortgage advisors that fail to comply or abuse the market.  To help with this, the FSA will be putting a new programme in place by the end of this year called a Supervisory Enhancement Programme.

Mr Sants urged companies to consider whether their current business models are able to work in the new phase of the credit crunch crisis.

According to The Times newspaper, the FSA played a major role in recent rights issues as it reportedly told particular banks to increase their Tier One capital ratios.  You will learn what these capital ratios are in your CeMAP training.

In addition, the FSA reportedly encouraged Alliance & Leicester to accept the takover approach, worth an estimated £1.3 billion from Spanish bank, Santander.

Despite the credit crunch crisis, there is still plenty of work for CeMAP qualified mortgage advisors as many consumers rush to remortgage to a better deal. With the decreased number of mortgage products available and stricter credit control, mortgage advice is more important than ever.



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