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Treasury considers extending regulation to help mortgage prisoners

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  • 28/01/2020
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Treasury considers extending regulation to help mortgage prisoners
Economic secretary to the Treasury John Glen has said the government is considering extending the regulatory perimeter to help borrowers trapped with inactive or unregulated lenders.

 

Glen made the statement in a letter to UK Finance CEO Stephen Jones, on the subject of helping mortgage prisoners.

“I am open to considering an extension to the regulatory perimeter where the benefits to consumers and markets can be demonstrated, however it is important that we do not raise false hope for these customers by pursuing a change that does not end up helping them,” he wrote.

Glen also followed the Financial Conduct Authority (FCA) in attempting to put pressure on lenders to accommodate the changes made by the regulator to mortgage rules.

However, analysis of the mortgage prisoner group by the FCA found only 14,000 borrowers were likely to be eligible and would benefit by remortgaging under the changes.

As Mortgage Solutions exclusively revealed, the FCA did not conduct any analysis of those borrowers who were trapped by being presently or recently in arrears.

Glen said it was important to closely monitor the impact of recent rule changes, “including the extent and pace of action” by UK Finance lenders.

He added: “I am determined to enable remortgaging for those who are eligible under the FCA’s rule change, meet the criteria for lending and would benefit from doing so.

“The FCA rule changes lifted regulatory barriers. I now would expect lenders to take the lead in making a real difference to this group of borrowers.”

 

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