The Deputy Chief Executive of the Royal Bank of Scotland (RBS), Gordon Pell, has hit out and stated that 100 per cent mortgages, where mortgages are granted to those that have no deposit whatsoever is ‘immoral’ and stated that this is like giving them a loaded gun. He added it is not in the interest of the consumer and felt it is ‘bad banking’ practice.
There has already been some pressure on the mortgage regulatory body the Financial Services Authority (FSA) and Prime Minister Gordon Brown to ban these mortgages altogether and such a comment from a senior person in the banking industry adds to this pressure.
The FSA has already stated it will be looking at restricting mortgage lending according to either income multiples or loan to value (LTV) this year.
Pell added that the RBS, now majority owned by the government, would have no problem if stricter limits were imposed by the FSA.
