The burning issue of mortgage prisoners was in a desperate need to get attention for a long time. The trauma that all the borrowers are going through is expected to come to a halt now. Some reforms have come into the picture that is sure to bring a much-desired change in the finance industry. To be precise, the customers that were not able to shift their mortgage to the other lenders can now do this. This need arises due to the untamed nature of mortgage lenders that are unauthorized and have a dominating impact on the lending policies beyond actual rules. Another big concern is for the loan companies that are authorized but inactive now. If people can get rid of them, they can have lucrative deals with much cheaper rates.
2 major reasons that stopped around 200,000 people switch to a new lender
Some strong stimulators worked strongly behind the occurrence of these stressful conditions.
These are –
The bad impact on the personal lives of people in this mess
An unavoidable reason that makes the issue even more serious is the negative impact on the personal lives of the borrowers. The situation is so big that it gave birth to a maze of traumatic circumstances around people.
1- Extreme stress
2- Relationship breakdown
5- A downfall in credit records
Chair’s comments from the Treasury committee
Rt Hon. Nicky Morgan MP, from the chair, expressed the side of the treasury committee in the following words.
“The Treasury Committee has systematically raised the issues of mortgage prisoners with the govt and therefore the FCA.
“In the condition of pressure from the Committee, the FCA has worked with business and established a voluntary consistency, that permits most of the one, 1000 mortgage prisoners of active lenders to modify to a much better deal.”
How FCA Prepare to Tackle it all?
Financial Conduct Authority has come into the picture with an effective proposal. It encapsulates remedial actions to break the chains of restrictions for the customers who are not able to switch their lenders.
With deep research of the whole scenario and a study of the pathetic circumstances of the affected people, FCA has framed a plan. Due attention is given on every important aspect to come up with the best possible and rational solutions.
Following Things Come In the FCA Proposal That Came On 26/03/19
1- Lenders are required to speed up the process and assist the borrowers to identify better remortgage deals.
2- Single Financial Guidance Body should take initiative to help borrowers make informed decisions.
3- Change mortgage advice rules to remove probable and potential barriers to innovation.
4- Make an in-depth analysis about the customers who do not want to switch the lender.
5- Mortgage for first- time buyers are also included in the reform.
FCA also suggested amendments to its rules to equip the lenders with the flexibility to perform a modified affordability test. This is sure to give a much-desired relief to the loan bearers.
The focal point of this proposal is the customers that are regular in their mortgage payments. If they want to shift to the other choice for affordable deals without borrowing more funds, a due chance should be in their access.
Towards Betterment – Prime Issues that FCA Proposal Solves
FCA has uncompromised attention on all the important aspects. Fund bearers have only good things to expect. The cause that makes the difference between the tough days and the improved times is the due implementation of the points in the proposal. If all goes well, the customers can enjoy the freedom from the stereotypical approach with the new dawn of comeback of good times. They can get –
A good number of people are expected to get huge benefits from these arrangements. This is sure to give a promising change not only in their financial lives but also personal. They can get complete control of their finances. The deformed financial situations due to hefty monthly installments reflecting high-interest rates affect their creditworthiness. They fail to qualify for any other financial product for instance – credit card, mortgage loans, insurance products like homeowners insurance, auto insurance, life insurance, etc. For equal financial opportunities to all, it is necessary to reform the rules. Also, the need is to bring the concerns in the notice of regulatory and decisive authorities. Delay in due action can spoil many financial lives while timely revival is the vital condition for the growth of not only natives but of the whole nation.