Mortgage Prisoners need urgent action on unfair rates, affordability tests & scope of FCA regulation
Updated: May 4
Response to the FCA's statement on mortgage prisoners announcing delays to the introduction of the new affordability test to enable them to switch lender
Seema Malhotra MP, Co-Chair of the APPG on Mortgage Prisoners said
"Six months on from when the FCA changed the rules it is disappointing that not a single mortgage prisoner has been able to switch using the new affordability test. The voluntary approach is proving far too slow and the FCA has acknowledged that the worsening market conditions will have implications for how many mortgage prisoners this measure will help. We recommend that the FCA and the Economic Secretary write to all mortgage lenders telling them to implement the new affordability test by July so that mortgage prisoners are able to switch as soon as possible after the end of any payment holiday they have received due to the Coronavirus." "We welcome the investigation by the FCA into the interest rates charged by inactive lenders. Too many mortgage prisoners have been exploited by being held on high standard variable rates or have seen their rate increased with no justification. The FCA should intervene quickly to cap the interest rates being charged." "The Government must expand the powers of the FCA so that it can protect customers who have their mortgages owned or influenced by unauthorised firms and vulture funds, too many have suffered for too long."