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Governmental criticism of mortgage companies is causing panic, says CML boss

24 October 2007
Michael Coogan, director general of the Council of Mortgage Lenders, has warned that by repeatedly accusing mortgage companies of “irresponsible lending”, the Government stands to cause mass panic amongst customers.

“The Chancellor’s continuing comments suggesting a lack of responsibility are not helping the reputation of the financial services industry”, Mr Coogan told the Daily Mail. “He is creating an environment where customers could lose confidence and that is wholly unnecessary.”

Rather, he said, the Government should be helping to restore the public’s faith in the mortgage industry, instead of issuing downbeat messages. The Northern Rock debacle has “given financial services a bad name in the UK”, he said, but other providers have revised their lending criteria and are taking much more care when deciding who they offer loans to.

In order to discuss the situation and the various issues facing the mortgage industry in the current unstable climate, Mr Coogan wrote to the Chancellor on 28th September but is still awaiting a reply which has reportedly angered him, because, he says, Mr Darling should not criticise the mortgage industry if he does not have any constructive advice as to what they should be doing differently.

In light of the crisis, he believes that consumer trust in the market is important in order for it to remain healthy and allow it room to develop new products. He also points to the rising number of homeowners who will need help as a result of the credit crisis and calls on the Government to up its support.

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