25 Nov

Protection for mortgage borrowers to be extended

Protection for mortgage borrowers to be extended

The Treasury has announced that it aims to extend the remit of the Financial Services Authority (FSA) to offer protection to borrowers whose mortgages are sold on to third parties.

Under proposals outlined on November 25th, FSA regulation would also broaden its scope to include buy-to-let and second-charge mortgages.

Following the announcement, the Association of Mortgage Intermediaries (AMI) voiced its support for the scheme, particularly in relation to the buy-to-let sector.

Robert Sinclair, director of AMI, said: "It is right that the proposals will exempt limited companies and focus on individuals who carry out buy-to-let transactions. Broadly, this appears to be codification of existing industry best practice."

Mr Sinclair added that this was unlikely to introduce any significant additional costs to businesses.

The government's consultation document builds on the Reforming financial markets plans released by the Treasury in July.

Consultation over the proposed legislation will close on February 15th 2010, with secondary legislation being used to implement any final measures.
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