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MP promises action for mortgage prisoners with ‘inactive’ lenders

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  • 14/11/2018
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MP promises action for mortgage prisoners with ‘inactive’ lenders
In a letter to Treasury Select Committee chair Nicky Morgan, John Glen MP, economic secretary to the Treasury has promised to change the law if needed to free mortgage prisoners with closed-book lenders like Bradford and Bingley (B&B) and NRAM.

In the letter, Glen said a key consideration for UKAR and the government is customer treatment.

In July this year, UK Finance, the Building Societies Association and the Intermediary Mortgage Lender’s Association announced a cross-industry voluntary arrangement to help mortgage prisoners.

Under the agreement, 67 lenders or 95% of the residential lending market, will write to any borrowers on the reversion rate who are up to date with payments and a minimum of two years and £10,000 still to pay on their mortgages to tell them their existing lender can offer them a better deal.

Glen said the government’s sale of B&B and NRAM loans to Cerberus does not stop its customers from remortgaging elsewhere, however the asset manager’s ability to become an active mortgage lender was not assessed in the original bid.

Glen said: “However, I am committed to exploring solutions which will benefit customers with NRAM, B&B and other inactive lenders.”

He said he shared the Treasury Select Committee’s concerns, following his testimony on 30 October, and will continue exploring ‘potential solutions’ and update when he has progress to report.

Rushanara Ali MP, member of the Treasury Committee, said: “The government and the Financial Conduct Authority have found an answer for customers of active firms. They must now be bold and innovative in finding a swift solution for mortgage customers of inactive firms. The committee will continue its work on this and keep a watchful eye on the government and regulator’s actions.”

Jackie Bennett, director of mortgages at UK Finance, said: “We strongly support the government’s commitment to explore potential solutions for customers who have mortgages with inactive lenders.”

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