‘This is a complex issue, but there should be onus on the regulated mortgage lender to ensure customers are treated fairly when they sell their mortgage books to unregulated entities. The FCA’s new approach to consumer protection may help protect against future sales causing detriment, but it provides little support to those who are already prisoners.
‘If the Government or the regulator was serious about putting the interests of consumers ahead of the profits of mortgage lenders, there are plenty of options available to it to remedy this scandal.’
Of the 195,000 borrowers who have mortgages in closed books with inactive firms, the FCA estimate that there are 66,000 who may be able to switch.
30,000 can’t switch but are unlikely to benefit from switching, 47,000 are mortgage prisoners, 34,000 are in payment shortfall, and 18,000 are near term.
Rob added: ‘The figures are alarming. With talks of a potential rise in the Bank of England’s base rate as well as financial burdens such as energy costs increasing, I’m sure many households will be worried this winter.
‘The FCA’s review has been a long time coming, but it falls short of ensuring practical and effective change for these individuals.’
The Government will use the FCA’s review to consider if there are any further solutions for mortgage prisoners.