Category: Mortgages

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House of Commons publishes written responses to questions on mortgage regulation

On 1 April 2019, the House of Commons published answers to two written questions:

–           What discussions the Chancellor of the Exchequer has had with the Financial Conduct Authority on the development of the cost benefit analysis used to assess the potential impact of the its proposals in ‘Mortgage customers: proposed changes to responsible lending rules and guidance’ (CP19/14); and

–           What estimate (with reference to CP19/14) the Chancellor of the Exchequer has made of the number of mortgage customers currently unable to switch their mortgage product who will not be able to benefit from modified affordability assessment proposals.

The answer to the first question can be found by clicking here (including the relevant letters) and the answer to the second question can be found by clicking here (including relevant letters).

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FCA publishes proposed new rules to help ‘mortgage prisoners’ re-mortgage or move to another lender

On 26 March 2019, the UK Financial Conduct Authority published a consultation paper, CP 19/14, called ‘Mortgage customers: proposed changes to responsible lending rules and guidance’ (the CP).

The CP proposes to revise the creditworthiness and affordability rules for certain customers who want to switch products, or re-mortgage with another lender, where:

– they are up to date with their payments under an existing regulated mortgage contract (and have been for at least 12 months) but are unable to do so because they do not meet the FCA’s detailed rules (which were introduced in April 2014 following the Mortgage Market Review); and

– they don’t want to borrow more (excluding any product or arrangement fee for the transfer or re-mortgage).

The CP contains the FCA’s proposed changes to the Mortgages and Home Finance: Conduct of Business sourcebook to (amongst other things) (a) relax those rules in certain circumstances and (b) contact customers who may be eligible.

The consultation period ends on 26 June 2019.