The Financial Services Authority (FSA) has met with a divided response from the UK mortgage industry over its proposals to ban loans that require no proof of income.

The City regulator last October proposed a ban on “self-certification” loans, which have allowed 1m borrowers to take mortgages without proving their income. Self-cert loans were intended to help the self-employed buy homes by taking their word about what they earned.

On Tuesday, it published a 34-page Mortgage Market Review feedback statement in response to a discussion paper on the proposals.

But the FSA said its proposal to make income verification a requirement for all mortgages generated a polarized reaction from those in the mortgage industry.