Debtor protection ‘to be strengthened’

Mortgage borrowers in the UK are to be better protected under new Treasury proposals that will see the Financial Services Authority (FSA) regulating third-party sales of mortgages.

A consultation document is to be published by the government, to close on February 15th 2010, detailing proposals to extend the FSA’s reach regarding second charge and buy-to-let loans.

Exchequer secretary Sarah McCarthy-Fry observed that the government has, since the start of the recession, been striving to ensure debtors are fairly treated by banks and that it is committed to reforming the system in order to improve protection for consumers.

“Our focus has been to do all we can to make sure people can stay in their homes and to limit repossessions as much as possible,” she said.

Aside from the Treasury’s upcoming paper, debtors have also been assisted by the Lending Standards Board, which recently brought out a code to help those obtaining credit.

The British Bankers’ Association noted that the guidelines would cover various areas, including credit referencing.

By Sarah Adie