FSA Announces Homeowner Protection Measures
Home owners who have been finding it difficult to keep up with their mortgage repayments will be given greater protection under new measures to be introduced by City watchdog, the Financial Services Authority (FSA).
The new rules will aim to ensure that those homeowners that are most at risk, such has borrowers who have fallen into arrears with their mortgage repayments or those who have entered into a sale and rent back scheme, are not exploited. Regulations by the FSA include not allowing banks to charge customers each month for being in arrears once a repayment plan has been put in place.
Those customers in difficulty will also be allowed to make payments towards the missed monthly repayments, rather than simply paying off charges levied by the bank. Repossession of people’s homes will be a last resort for lenders. Lenders will also be required to record all phone calls relating to arrears issues and these will be kept on record for a minimum of three years.
The FSA also announced that those people who enter into rent back schemes (when they sell their home and the new owner rents it back to them) will be given greater protection as companies often use unfair tactics and aggressive sales techniques to get people to agree. Companies that work in this business will no longer be allowed to use pressured sales techniques and exploitive language, such as "mortgage rescue", "fast sale" or "cash quickly" in their leaflets.
In addition, customers entering into an agreement with these companies will have the opportunity to change their mind since they will be afforded a 14-day cooling off period.
UK Property news posted by Garry on 30 June 2010
