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 Parliament.