Good news for buy to let mortgage holders as FSA extends powers

Regulation of the buy to let mortgages sector is to be added to the remit of the Financial Services Authority, in a move announced by the Treasury this week. 

The Financial Services Authority is also to regulate third parties who buy mortgages from lenders, to provide additional security to mortgage borrowers. 

Regulation by the Financial Services Authority of hedge funds and private equity firms who buy up mortgage books from lenders should ensure that mortgage borrowers are protected from repossession in the same way that they would be if their loans were with traditional mortgage lenders. 

The new measures dovetail with the government’s existing measures to protect mortgage holders through the Homeowner Mortgage Support Scheme, which was introduced in April this year. 

The Scheme works with leading mortgage lenders including Lloyds/Halifax, RBS, Bradford & Bingley, and Cheltenham and Gloucester to offer mortgage borrowers who suffer a loss of income the opportunity to cut the interest repayments on their mortgages for up to 2 years.