UK To Give Greater Protection For Mortgage Borrowers

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The UK government plans to strengthen the protections enjoyed by mortgage borrowers through new proposals, the HM Treasury said Wednesday.

The Government is proposing the expansion of the Financial Services Authority's remit to include the regulation of buy-to-let mortgages. The government intends to extend the scope of FSA regulation to include second-charge mortgages. It also proposes protection for borrowers when lenders sell on mortgage books to third parties.

The consultation seeking comment from lenders and consumer groups sets out the details of the proposed legislation and will close on February 15, 2010 and any final measures will be implemented through secondary legislation.

Exchequer Secretary, Sarah McCarthy-Fry said, "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."

Responding to the government proposals, Council of Mortgage Lenders said, "We will now study the Treasury consultation paper in detail, in parallel with the FSA's consultation on potential changes arising from the Mortgage Market Review." CML supported the extension of FSA regulatory scope to second-charge lending and also the rationale for extending regulatory scope to the acquirers of mortgage portfolios when they are sold on by the originator.

The UK government plans to strengthen the protections enjoyed by mortgage borrowers through new proposals, the HM Treasury said Wednesday. (Market News Provided by RTTNews)