The protections enjoyed by UK mortgage borrowers are to be strengthened under
new proposals published by the Treasury on Wednesday.
Under the proposals, borrowers whose mortgages are sold onto third parties
will be protected by Financial Services Authority (FSA) 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
mortgages and second charge mortgages.
Making the announcement, 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 mortgage market regulation. 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, which sets out the
details of the proposed legislation. Consultation will close on 15 February
2010 and any final measures will be implemented through secondary legislation.
The consultation builds on announcements made in Reforming Financial Markets, which was published by HM
Treasury in July of this year and set 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
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