Mortgages

(asked on 17th July 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of banning the sale of mortgage books to lenders who are (a) unregulated and (b) do not offer new mortgages.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 22nd July 2020

In all government-owned (ex-Bradford & Bingley and Northern Rock) United Kingdom Asset Resolution (UKAR) sales, customer treatment is a key consideration for UKAR and the government in selecting a bidder and all bidders have to agree to UKAR’s customer treatment conditions in order for their bid to be considered. This is a strict requirement, not open to negotiation, and is considered before bids are assessed on price. The purchaser is obliged to ensure the servicer of the mortgages is regulated by the FCA. For the latest asset sale and future sales the legal title holder must also be FCA-regulated. This is a contractual requirement.

Range of buyers, including active lenders, will be invited to participate in any future UKAR asset sales and we will continue to require bidders agree to our robust customer protections. However, selling UKAR assets to active lenders does not guarantee that customers would be able to access new products.

It is a legal requirement that all owner-occupied mortgages must be serviced by an administrator that is regulated by the Financial Conduct Authority (FCA). This means that customers are protected by the FCA’s Mortgages and Home Finance: Conduct of Business rules, and that customers have recourse to the Financial Ombudsman Service (FOS).

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