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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