Financing of Mortgages

Our Ref: PC65471.ISS01143982

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Dear Sir/Madam

Thank you for your email dated 18 November 2009.

I understand that you have enquired how banks finance mortgage lending and methodology they may use to facilitate this.

Our response:

It is clear from your email that you retain a keen interest in the UK's financial services industry, particularly in relation to prudential regulation.

The Financial Services Authority (FSA) cannot generalise across the entire industry which mix of capital resources a firm uses to fund their mortgage lending. This is because firms can use a variety of methods to raise capital that can then be used for lending purposes. I can however, direct you to the regulations for eligible types of capital, which are listed in our General Prudential sourcebook (GENPRU). Chapter 2: Capital provides a table of the types of capital firms may use.

http://fsahandbook.info/FSA/html/handboo...

You may be interested to read our recent Mortgage Market Review discussion paper, which discusses the case for regulatory reform of the mortgage market:

www.fsa.gov.uk/pages/Library/Policy/DP/2...

The Customer Contact Centre - how we can help

If you have any future questions on financial services and products, you may find it easier to call our Consumer Helpline on 0845 606 1234 (call rates may vary). Before doing so, you can learn about the work we carry out as the point of contact for consumers in our information sheet 'The Customer Contact Centre': http://www.moneymadeclear.fsa.gov.uk/pdf....

I trust this is of assistance.

Yours sincerely

Patrick Bonham (Mr)
Customer Contact Centre
Financial Services Authority
Consumer Helpline: 0845 602 2185 (call rates may vary)
www.moneymadeclear.fsa.gov.uk
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The Financial Services Authority (FSA)
25 The North Colonnade,
Canary Wharf,
London
E14 5HS
United Kingdom
Registered as a Limited Company in England and Wales No.1920623.
Registered Office as above
Switchboard: 020 7066 1000
Web Site: http://www.fsa.gov.uk
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