Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of (a) the merits of the sale of £4.9 billion of former Northern Rock loans to Citibank on the ability of those mortgage loan holders to transfer or get better terms from other regulated lenders, (b) whether properties of Northern Rock mortgage holders' loans held under AKAR and sold between 2012 and 2018 were sold to (i) inactive and (ii) unregulated lenders.
Answered by John Glen
As with all UKAR transactions, HM Treasury considered the potential impacts on customers and concluded that this sale does not negatively affect any customer’s ability to remortgage with another loan provider. In addition, UKAR have put in place protections that mean there are no financial barriers, such as early repayment charges, in the way of customers seeking to remortgage with another provider. Customers will be in a better position to change their mortgage following the proposed Financial Conduct Authority (FCA) rule change, provided they are up to date with their payments and meet lenders’ risk appetites.
The details of UKAR mortgage sales from 2012 to 2018 can be found on gov.uk. Both active and non-active lenders are invited to participate in UKAR sales to ensure a competitive process. In relation to the latest asset sale, UKAR’s advisors proactively invited the top 25 active lenders to participate. Notwithstanding this, UKAR did not receive a bid from an active lender that covered the full portfolio of assets being sold.
HMT has worked closely with the FCA on their mortgage market study and their planned changes to affordability assessments. These changes remove the regulatory barriers which previously might have prevented borrowers from accessing new mortgage deals, regardless of whether they are with active or inactive lenders. HMT will continue to work closely with the FCA once the changes to their rules are implemented to monitor the impact this will have on the market.
For the latest asset sale, the legal title to the regulated mortgage contracts will always be held by an FCA-regulated entity in addition to the existing regulatory requirement that they are serviced by an FCA-regulated entity. This ensures continued FCA oversight and that customers have access to the Financial Ombudsman Scheme. Moreover, the legal title holder will be required to provide regular loan level reporting to the FCA.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions his Department has had with the FCA on the adequacy of their mechanisms for monitoring the outcomes for mortgage holders whose loans have been sold on by UKAR to inactive lenders.
Answered by John Glen
As with all UKAR transactions, HM Treasury considered the potential impacts on customers and concluded that this sale does not negatively affect any customer’s ability to remortgage with another loan provider. In addition, UKAR have put in place protections that mean there are no financial barriers, such as early repayment charges, in the way of customers seeking to remortgage with another provider. Customers will be in a better position to change their mortgage following the proposed Financial Conduct Authority (FCA) rule change, provided they are up to date with their payments and meet lenders’ risk appetites.
The details of UKAR mortgage sales from 2012 to 2018 can be found on gov.uk. Both active and non-active lenders are invited to participate in UKAR sales to ensure a competitive process. In relation to the latest asset sale, UKAR’s advisors proactively invited the top 25 active lenders to participate. Notwithstanding this, UKAR did not receive a bid from an active lender that covered the full portfolio of assets being sold.
HMT has worked closely with the FCA on their mortgage market study and their planned changes to affordability assessments. These changes remove the regulatory barriers which previously might have prevented borrowers from accessing new mortgage deals, regardless of whether they are with active or inactive lenders. HMT will continue to work closely with the FCA once the changes to their rules are implemented to monitor the impact this will have on the market.
For the latest asset sale, the legal title to the regulated mortgage contracts will always be held by an FCA-regulated entity in addition to the existing regulatory requirement that they are serviced by an FCA-regulated entity. This ensures continued FCA oversight and that customers have access to the Financial Ombudsman Scheme. Moreover, the legal title holder will be required to provide regular loan level reporting to the FCA.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has conducted of the (a) credentials and (b) status as active mortgage lenders of groups and companies which have purchased former Northern Rock mortgages and loans at sales undertaken by UK Asset Resolution (UKAR) since 2015.
Answered by John Glen
For each asset sale UKAR undertakes due diligence on sale participants.
Both active and non-active lenders are invited to participate in these sales to ensure a competitive process. Government and UKAR do not discriminate on bidders based on their lender status and, in relation to the latest asset sale, UKAR’s advisors proactively invited the top 25 active lenders to participate. Notwithstanding this, to date, UKAR has not received a bid from an active lender that covers the full portfolio of assets being sold.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what criteria in terms of protection for long-term holders of former Northern Rock mortgages were established by UK Asset Resolution before conducting such sales.
Answered by John Glen
The Government and UK Asset Resolution (UKAR) take treating customers fairly very seriously. UKAR has always included non-negotiable customer protections as part of the legal documents in every sale, past and present. Bidders must accept these terms before their bids are considered on price. For past sales, these protections required that: the servicer of the mortgages is regulated by the Financial Conduct Authority (FCA); the terms and conditions of the mortgages are not changed; and purchasers abide by restrictions on how the Standard Variable Rate (SVR) can be set.
The Government and UKAR have listened to stakeholders on the issue of customer protections and have enhanced the protections for current and future sales. New protections include: requiring that both the servicer and legal title holder are FCA-regulated; restrictions on setting SVRs for the lifetime of the mortgage; and no early repayment charges, should a customer wish to switch mortgages.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what criteria for the protection of mortgage holders he plans to direct UK Asset Resolution to use in its future sales of mortgages and loans.
Answered by John Glen
The Government and UK Asset Resolution (UKAR) take treating customers fairly very seriously. UKAR has always included non-negotiable customer protections as part of the legal documents in every sale, past and present. Bidders must accept these terms before their bids are considered on price. For past sales, these protections required that: the servicer of the mortgages is regulated by the Financial Conduct Authority (FCA); the terms and conditions of the mortgages are not changed; and purchasers abide by restrictions on how the Standard Variable Rate (SVR) can be set.
The Government and UKAR have listened to stakeholders on the issue of customer protections and have enhanced the protections for current and future sales. New protections include: requiring that both the servicer and legal title holder are FCA-regulated; restrictions on setting SVRs for the lifetime of the mortgage; and no early repayment charges, should a customer wish to switch mortgages.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to provide funding for students due to start their Erasmus+ placements after 29 March 2019 in the event of the UK leaving the EU without a deal.
Answered by Elizabeth Truss
In the event that the UK leaves the EU with a withdrawal agreement in place, the UK will participate in Erasmus+ until the end of the current cycle in 2020. Leaving the EU with a deal remains the government’s top priority.
In the event the UK leaves the EU without a withdrawal agreement, the Government will engage with the European Commission with the aim of securing the UK’s participation in Erasmus+ until 2020.
Further information can be found at https://www.gov.uk/government/publications/erasmus-in-the-uk-if-theres-no-brexit-deal/erasmus-in-the-uk-if-theres-no-brexit-deal