MPs ask for tougher mortgage prisoner regulation changes

An all-party parliamentary group on mortgage prisoners has responded to the FCA’s recent consultation by stating that the proposed rules do not go far enough.

The APPG, chaired by Seema Malhorta MP and Lord Sharkey, reports that it spoke to over 100 mortgage prisoners, the stories from whom it used in composing its report.

As with the majority of responses to the consultation paper seen so far, the group says that it welcomes the consultation and approves of many of the proposed changes. However, it also says that “many mortgage prisoners will remain trapped with their existing lender and still be vulnerable to exploitation.”

It adds that if these customers cannot be protected by the power wielded by the FCA, then the latter should lobby the government for an “expansion to the scope of its regulation.”

The APPG made six recommendations in this vein, some echoing those published yesterday by StepChange and the BSA

These are: to execute the proposed changes to the affordability test quickly – specifically by the end of July; to allow borrowers in arrears on to this new affordability test; to make the test compulsory for mortgage prisoners switching within the same lender; to ensure that changes to the affordability test are communicated quickly; to strengthen customer protection in terms of selling mortgage books; and to ensure that active lenders apply the new affordability test to new customers who are currently with another lender.

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