Financial Secretary to the Treasury today announced a package of measures intended to enhance consumer protection in the mortgage market.
The Financial Secretary to the Treasury, Mark Hoban, today announced a package of measures intended to enhance consumer protection in the mortgage market. These measures will:
- transfer the regulation of new and existing second charge residential mortgages from the Office of Fair Trading (OFT) to the Financial Services Authority (FSA), to ensure consistent standards of consumer protection and simplify the regulatory environment for lenders and borrowers;
- ensure consumer protections are maintained when a mortgage book is sold by a mortgage lender to an unregulated firm; and
- extend the current regulation of the sale and rent back market to all providers, to ensure appropriate protection for consumers.
Mark Hoban, Financial Secretary to the Treasury:
The Government believes that this package of measures will enhance protection for consumers in the mortgage market. Giving the FSA responsibility for the whole residential mortgage market will simplify the mortgage regulation landscape for consumers and lenders. This will ensure that existing second charge mortgage borrowers who fall into arrears or face repossession on both first and second charge mortgages benefit from being regulated by a single organisation, maximising consumer protection and ensuring a more coordinated approach between lenders.
The measures on mortgage books and sale and rent back have been introduced to address a genuine gap in the regulatory architecture, and will ensure consumers will be better protected in the mortgage market.
The statutory instruments will be published later in 2011. In advance of this, the Government expects the FSA to begin work immediately to implement these measures.
Notes for editors
First charge mortgages are already regulated by the Financial Services Authority and will be regulated by the Consumer Protection and Markets Authority (CPMA) once it has been established.
An additional measure relating to a devolved matter - providing an exemption from FSA regulation for registered housing associations in Northern Ireland - has also been included in the package.
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