The Government introduced Financial Services Authority regulation of mortgages in 2004. The FSA’s regime provides important protections for borrowers. It requires lenders to treat their customers fairly, and to treat repossession as a last resort.
FSA regulation is supported by the new mortgage pre-action protocol introduced in November 2008. This sets out clear guidance on what actions judges expect lenders to take before bringing a claim in the courts to help ensure that lenders have tried to discuss and agree other alternatives with the borrower.
Through the new Lending Panel, announced in the 2008 pre-Budget report, the Government are working closely with lenders, consumer groups and regulators to monitor lending to businesses and households. The lenders on the Lending Panel have committed not to repossess where the owner-occupier is less than three months in arrears.
The Government launched Homeowners Mortgage Support on 21 April. This new scheme, together with changes announced at Budget 2009 to Support for Mortgage Interest (SMI) and the Government’s Mortgage Rescue Scheme, will help homeowners who experience a temporary income shock, lose employment, or are otherwise vulnerable, to remain in their homes. The Government have also taken action to help ensure that every household struggling with debts has access to free and impartial debt advice.
The Chancellor receives representations from a wide range of stakeholders on issues relating to repossessions.