New FSA Proposals Could Help Mortgage Customers

New FSA proposals for mortgage borrowers

The Financial Services Authority (FSA) has outlined new suggestions for mortgage borrowers to ensure that they can afford monthly mortgage payments.

The FSA wants to ensure that mortgage customers are protected and that lenders only lend to those who can afford mortgage payments.

Key proposals:

  • Introducing affordability tests
  • Verification of borrowers’ income
  • Extra protection for susceptible customers

The proposals are a direct result of a review undertaken by the FSA, which looked into causes of mortgages in arrears and repossessions since 2005.

Conclusions from the review:

  • Nearly half of all households either had no money left or had a shortfall, after mortgage payments and living costs were deducted from their income
  • Almost 50% of new mortgage customers were not asked to verify their income between 2007 and 2010
  • Interest-only mortgages have been increasing, at the topmost, 30% of all mortgages were interest-only
  • Many borrowers depend on future house price rises and unsure life events to repay their mortgage
  • Customers with credit-impaired history are the most vulnerable

The FSA director responsible for the mortgage market, Lesley Titcomb, said:

There is a clear link between financial overstretch and mortgage arrears and repossessions, and we are determined to protect vulnerable consumers by making sure that everyone who takes on a mortgage can afford to pay it back.

Payplan

If you are struggling to manage your monthly outgoings then contact Payplan for free debt advice online or simply call 0800 280 2816.

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Arrears support service for lenders shortlisted for credit industry accolade.

Payplan’s Arrears Management Assistance (AMA)

Payplan’s Arrears Management Assistance (AMA) service has been shortlisted in the category of Money Advice Initiative at an awards ceremony honouring key achievements in the credit industry and related organisations.

Free debt solutions service, Payplan, set up the Arrears Management Assistance (AMA) offering in January 2009 to provide specialist support to mortgage lenders with customers who are suffering financial hardship and cannot meet their mortgage payments alongside their other financial commitments.

By working with lenders and encouraging their customers to seek early, independent free debt advice, AMA is able to provide sustainable and affordable repayment strategies for mortgage arrears while offering the customer clear, step-by-step advice and solutions to help them keep their home.

Treating Customers Fairly (TCF)

The service assists lenders in meeting their TCF requirements and has enabled some lenders to develop a value added service to their forbearance policies and processes. AMA is currently working alongside a number of mortgage lenders, including GE Money Home Lending and Yorkshire Building Society.

Phil Bushell, Manager of AMA, said:

“We are thrilled to have been recognised by the credit industry for the work we are doing to tackle the problem of mortgage arrears. Part of the service’s innovation lies in the fact that it aims to change the thinking on tackling mortgage arrears, by looking at the whole of the customer’s financial situation rather than just focusing on the secured commitments. With Payplan’s long history of helping people resolve their debt problems, we are well placed to offer this support to lenders.”

Kellie Evans, from GE Money Home Lending, said:

“Payplan provides a valuable service for customers that require support and guidance. The feedback from our customers that have engaged with Payplan has been extremely positive and we are delighted the company has been shortlisted for such a prestigious award. GE values its relationship with Payplan and is committed to delivering the best service possible to customers.”

Now in its 11th year, the Credit Today awards ceremony is set to take place on 13th May 2010 at the Grosvenor House Hotel, London. The Money Advice Initiative is a brand new category at this year’s awards.

About Payplan

Payplan is a free debt advice and solutions service that provides impartial advice to people in financial distress. Payplan helps over 100,000 people every year and works closely with organisations in the field of money advice and consumer and employee welfare.

Payplan Press Officer

For further information please email our Press Officer Jayne Newton at:
jayne.newton@payplan.com

or telephone:

01476 541980 or 07812 736861

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Mortgage Lending Up in February

Mortgage lending reaches £9.2 billion

Gross mortgage lending in February increased to an estimated £9.2 billion, a 6% rise from £8.7 billion in January, according to new data published by the Council of Mortgage Lenders.

The increase, which is unusual for the short month for February, is in contrast to January’s performance where bad weather the end of the Government’s stamp duty holiday is thought to have put-off potential home-buyers.

The Council of Mortgage Lenders (CML) reported lending in February down by 6% on the £9.7 billion seen in 2009.

Upon the recent figures the CML report the first two months of this year broadly in line with their forecast for lending of £150 billion for 2010 as a whole.

CML economist Paul Samter commented:

“Given the short-term weakness and distortions in the housing market, in addition to signs of more properties coming onto the market, it was perhaps unsurprising to see falls in some of the monthly house price indices in February. With activity unlikely to pick up much in the short term, we would expect to see further modest volatility in the coming months.”

The Council of Mortgage Lenders’ members are banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK.

Payplan

Contact Payplan today for free, confidential debt advice or call 0800 280 2816

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House Prices See Rapid Increase

House Prices Set to Return 2007 Levels

Recent predictions made by the Centre for Economics and Business Research (CEBR) suggest that the average house price is expected to climb by 6.5% to £178,000 in 2010.

The CEBR also believes that 2012 prices will return to those previously recorded in 2007, with a high of £198,000 expected a year earlier than predicted.

Increased Mortgage Lending

In their market predictions the CEBR said it expected banks and building societies to approve more mortgages, making it easier for buyers to access the money needed to purchase a house, in turn helping to push up prices.

Nationwide

Market predictions released by Nationwide also suggest prices could climb 10% on an annual basis, as the mortgage lender recorded a 1.2% rise in January 2010, more than double the 0.5% gain seen in December 2009.

Nationwide’s Chief Economist Martin Gahbauer claims:

Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007.

www.payplan.com

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