You are here: Home - Mortgages - First Time Buyer - News -

Mortgage prisoner bill presented to Parliament

0
Written by:
09/05/2019
A bill aimed at helping mortgage prisoners - those who can't switch mortgages in spite of a clean repayment record - is due for its second reading in Parliament today, after being presented to MPs last night.

Conservative MP Charlie Elphicke introduced his ten minute bill – a way for backbenchers to attempt to introduce legislation – named Banking (Consumer and Small Business Protection) earlier this week.

The bill aims to help borrowers who are currently stuck in an uncompetitive deal, potentially with an inactive lender, to transfer to a new lender.

Elphicke’s bill would ban lenders from selling their mortgage books onto unregulated businesses.

Elphicke criticised the FCA and the Treasury for allowing Northern Rock’s old loan book to be sold to “vulture funds” without additional protection to ensure they do not end up on even more costly rates, but with little option of remortgaging.

He said: “It is wrong for the Treasury to have allowed borrowers to be placed in a worse position than would otherwise have been the case.”

Elphicke said that these borrowers took out their deals long before the current affordability rules were introduced, and have proven they can meet their repayments, yet they miss out on cheaper deals because of a “computer-driven affordability test that ignores the reality of the real world”.

He continued: “These borrowers should be treated as grandfathered as regards the later regulatory rules that came in. Banks should be obliged by the FCA to take people on and treat them as grandfathered, whether they are existing customers or not, and the new mortgages should be permitted without any regulatory penalty for the bank they move to.”

Ten minute bills are only likely to become legislation with the backing of the government. The bill will be read for a second time today, followed by a debate.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Angry man on the phone
Estate agents forced to make record customer compensation payouts

Estate and letting agents were instructed to make payouts to disgruntled customers worth around £2.17m in 2018 by the Property...

Close