The government has taken steps to try and protect struggling homeowners in the difficult financial climate by bringing in a range of new measures that will prove additional safeguards for those that could otherwise be at risk of losing their homes.
The UK’s financial regulator has decided to make all mortgage advisors personally responsible and accountable through the introduction of new rules and regulations that will apply to companies that deal with consumers that are behind on their mortgage repayments.
The FSA started a review of the mortgage market in the autumn of last year, and has now said that all mortgage sale firms and employees will have to be FSA approved. In addition to providing additional protection for those that are behind with their mortgage repayments the regulator is also looking to increase protection for those that decide to sell and rent back their homes.
Sale and rent back scheme shave become increasingly popular over recent years, with homeowners desperately trying to find a way of being able to stay in their home before they are repossessed due to mortgage arrears. Through these schemes they can sell the home and then rent it back from the company, but there have been many problems including the companies evicting the former homeowners shortly after taking the property from them.
Under new regulations companies that buy homes to rent back to former homeowners will have to give them tenure of at least five years. According to reports these, and other new protective measures, will come into play at the end of June.
An FSA official said: “Sale and rent back is often used by those who want to sell in a hurry to stay in their home, and so it is vital that they are better protected during what is usually a difficult period financially. We also think it is wrong that arrears charges should be taken from customers already in difficult circumstances.”
