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Mortgages: Compensation

Volume 481: debated on Tuesday 21 October 2008

To ask the Chancellor of the Exchequer whether he has considered the merits of setting up a compensation scheme to assist mortgage holders facing negative equity as a result of the mis-selling of mortgages by banks. (227926)

In 2004 the Government extended the scope of Financial Services Authority (FSA) regulation to cover mortgages. FSA regulation ensures that borrowers are afforded suitable protections. FSA regulation also provides appropriate means of redress for borrowers through recourse to the Financial Ombudsman Service (FOS). The Financial Service Compensation Scheme (FSCS) provides compensation for borrowers in case a financial institution is unable to meet its liabilities.