Lenders withdrawing from the mortgage market has caused concern among a number of MPs.
In a letter addresses to the Financial Conduct Authority (FCA), Treasury and the Bank of England, Kevin Hollinrake, co-chair of the All-Party Parliamentary Group (APPG) on Fair Business Banking and Seema Malholtra, chair of the APPG for Mortgage Prisoners voiced their concerns.
The MPs said that the information on lender’s websites should make it clear that the three-month holiday repayment applies to all borrowers, including those in arrears.
It also mentioned that unregulated lenders were being slow to act, and in some instances, refusing to cooperate.
In addition, within the letter, it outlined some unregulated lenders were still threatening legal and repossession action.
Furthermore, the MPs believe the FCA’s prediction that 14,000 mortgage prisoners will benefit from affordability assessment changes will now shrink.
As a result, the MPs have requested an expansion of the FCA’s regulatory powers, including for the authority to be able to direct terms of commercial lending to insure funding is sped up.
The MP would also see the FCA to be able to direct payment holidays on commercial loans on the same terms as residential and buy-to-let; and that the FCA would have a more direct oversight of currently unregulated funds, both commercial and residential.
The letter stressed that if action was not taken within the next three to 18 months, a repeat of many of the problems seen in 2008 will occur.