The Financial Services Authority is also calling for a ban on mortgages containing "toxic combinations" which put borrowers at a higher risk, such as lending a high proportion of a property's value to people with impaired credit histories.
Other measures being proposed include bringing buy-to-let mortgages and all other lending secured on a home within the FSA's regulatory scope. The FSA said the proposals, published in its mortgage market review discussion paper, reflected a shift to a more intrusive and interventionist style of regulation.
All mortgage advisers will also have to be personally accountable to the FSA under the proposed regime. It said it recognised the need for a `step change' in regulation.
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