Home loan borrowers to benefit from increased protection

By Nicholas Boyle

Home loan borrowers to benefit from increased protection

The Guardian has reported that home loan borrowers will benefit from `increased protection` following the introduction of new regulations announced by the Treasury on Wednesday.

The regulation of second charge home loans is to be transferred from the Office of Fair Trading (OFT) to the Financial Services Authority (FSA).

Second charge home loans - usually taken out by customers lenders see as `higher risk`, and often used to repay other debts - are more expensive than first charge home loans, and lenders tend to act faster if the borrower falls into arrears.

First charge home loans are already regulated by the FSA, and as Mark Hoban, financial secretary to the Treasury, said, transferring second charge home loans `would ensure consistency of standards and simplify regulation for lenders and borrowers`.

The FSA will need to issue consultation papers about the proposals, and the transfer of regulation of second charge home loans is expected to take place in early 2021.

Tags: loan, loans, borrow, borrowers, protection

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