Mis-sold Mortgage Claims > Mortgage News
FSA to ensure protection for borrowers
Tue, 13 Jul 2010
The Financial Services Authority has today announced a number of moves to ensure that borrowers are protected from the irresponsible lending practices of the past. At the heart of the proposals are changes to make sure affordability of all mortgages is a key factor.

The key points within the proposal are:

• Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer's ability to pay;

• Requiring verification of borrowers' income in every case to prevent over inflation of income and to prevent mortgage fraud ;

• Extra protection for vulnerable customers with a credit-impaired history.

The FSA’s director,Lesley Titcomb, responsible for the mortgage lending sector comments: "There is a clear link between financial overstretch and mortgage arrears and repossessions, and we are determined to protect vulnerable consumers by making sure that everyone who takes on a mortgage can afford to pay it back.

"While it is clear the mortgage market has worked well for many, we need to build a strong new framework to protect mortgage customers and to ensure that the problems we have seen in the past do not happen again, particularly as the mortgage market recovers."

In today's report there are also the key findings from the FSA's review into charges made to borrowers in arrears, these indicated a significant variation in the level of arrears fees charged across the mortgage market.

New rules require arrears charges to be based on a reasonable estimate of the cost of any additional administration required resulting from the customer being in arrears. The FSA is actively seeking views from consumer groups and the industry.
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