News Details
26 Jan, 2011
FSA to take over responsibility for 2nd Charge loans & sale and rent back
Second-charge loans,
Sale & Rent Back and mortgage back book administration will all be
regulated by the FSA, the Treasury confirmed today in a bid to enhance
consumer protection.
Portfolios of mortgage
loans will also be regulated by the FSA which will result in protection for
consumers if their loan is sold on to another lender or unregulated firm. The FSA also plans to
extend the current regulation of the sale and rent back (SARB) market to all
providers, which it said will ensure appropriate protection for consumers. Treasury Minister
Hoban, said: "The Government believes that this package of measures will
enhance protection for consumers in the mortgage market. 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." He said this step was
taken on mortgage books and sale and rent back to address a genuine gap in the
regulatory architecture and make sure consumers are better protected in the
mortgage market. It is expected that the FSA will begin to implement plans ahead of the statutory instruments being finalised.
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