UK Treasury consults on protection for mortgage borrowers as part of the ambitious reform of financial markets

26 November 2009

Borrowers whose mortgages are sold on to third parties will be protected by FSA regulations requiring fair treatment of customers. The FSA's remit will be expanded to include the regulation of buy-to-let and second-charge mortgages.

The protections enjoyed by UK mortgages borrowers are to be strengthened under new proposals published by the Treasury today. Under the proposals, borrowers whose mortgages are sold on to third parties will be protected by Financial Services Authority regulations requiring fair treatment of customers. In addition, the Government is proposing the expansion of the FSA's remit to include the regulation of buy-to-let and second-charge mortgages. Exchequer secretary Sarah McCarthy-Fry said: ‘Since the onset of the global financial crisis, the Government has worked hard to ensure mortgage borrowers are treated fairly by their banks. Our focus has been to do all we can to make sure people can stay in their homes and to limit repossessions as much as possible. ‘But we are aware that this crisis has raised issues around the world about the regulation of the mortgage market. We are determined to reform the system for the future, to offer both stronger protection for consumers and greater

The protections enjoyed by UK mortgages borrowers are to be strengthened under new proposals published by the Treasury.

Under the proposals, borrowers whose mortgages are sold on to third parties will be protected by Financial Services Authority regulations requiring fair treatment of customers.  In addition, the Government is proposing the expansion of the FSA’s remit to include the regulation of buy-to-let and second-charge mortgages.

Sarah McCarthy-Fry continued:

‘Since the onset of the global financial crisis, the Government has worked hard to ensure mortgage borrowers are treated fairly by their banks.  Our focus has been to do all we can to make sure people can stay in their homes and to limit repossessions as much as possible’.

‘But we are aware that this crisis has raised issues around the world about the regulation of the mortgage market.  We are determined to reform the system for the future, to offer both stronger protection for consumers and greater stability in the housing market.’

The Government is publishing a consultation document setting out its proposals to:

• extend the scope of FSA regulation to include second-charge mortgages;
• extend the scope of FSA regulation to include buy-to-let mortgages; and
• protect borrowers when lenders sell on mortgage books to third parties.

The consultation builds on announcements made in reforming financial markets, which was published by HM Treasury in July, and sets out the Government’s analysis of the causes of the financial crisis, along with a series of proposals to reform and strengthen financial regulation, and protect and support consumers. The Government will implement these proposals via the Financial Services Bill currently before Parliament.

Deadline for comments is 15 February 2010

 

Press release

Consultation paper

 

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