Mortgage borrowers 'to be protected'

Posted: 27 Nov 2009 11:49:28 GMT

Property owners are to have their mortgage protection strengthened, under new government proposals.

The Treasury has suggested that once measures are in place, mortgage borrowers will be protected by the Financial Services Authority if their home loan is sold on to a third party from the original lender.

Exchequer secretary Sarah McCarthy-Fry stated that the Treasury is determined to reform the system to give consumers better protection.

Robert Sinclair, director at the Association of Mortgage Intermediaries, said that he understands why the government want to do this.

However, he went on to add that he is not sure how the proposals are going to work as in most cases the home loan will already have been sold on and it will be hard to apply the new regulations retrospectively.

Similarly, the Council of Mortgage Lenders (CML) has had a mixed response.

The CML advised that it is vital the regulations avoid creating any other unforeseen negative effects as there are bound to be technical issues which will need to be smoothed over.

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