U.K.'s FSA Finds Poor Practice in Subprime Market

Britain's financial watchdog has found poor practice by intermediaries and lenders in the U.K. subprime mortgage market and has launched enforcement action against five firms, it said on Wednesday.

The Financial Services Authority, in a review of the sector, said it found weaknesses in responsible lending practices and in the assessment of whether consumers could afford a mortgage.

"Poor sales practices in this market may lead to serious wider consequences," Clive Briault, the FSA's managing director of retail markets, said.

"The high level of subprime arrears in a benign market raises some important questions about the consideration given to affordability by lenders and intermediaries when undertaking this business."