MPs to pursue arrears inquiry

The Treasury Committee is to carry out a follow-up inquiry into borrowers struggling with their mortgage payments following an earlier report published last year.

MPs published the report ’Mortgage Arrears and Access to Mortgage Finance’ last August.

The Committee has now decided that a follow-up inquiry is needed to look house households affected by the recession who struggling with arrears and at risk being repossessed.

Evidence will be gathered on the following points:

  • The number of home owners in mortgage arrears, the number of homeowners who have had their properties repossessed, and forecasts for the trend in mortgage arrears and repossessions over the medium-term;
  • Changes in the treatment of home owners in mortgage difficulties by lenders, including second charge and specialist lenders;
  • The package of measures outlined by the Financial Services Authority in its October 2009 Mortgage Market Review and subsequent January 2010 paper to improve arrears handling policies and practices by firms;
  • The FSA’s regulatory approach in this area, including the effectiveness of its enforcement strategy;
  • Mortgage arrears charges levied by lenders, including changes in practice by lenders in this area;
  • The effectiveness of government schemes to support home owners in mortgage difficulties;
  • The extent to which the current regulatory framework protects households in the private rented sector.

The deadline for submissions to the Committee is 12pm on March 1, with the Committee planning to hold oral evidence sessions later in March.