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20/10/2009
Legal change may have property law implications |
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New laws on the selling of mortgages are to be introduced that will place a burden of liability on the lender to ensure they are offering an affordable product.
The Financial Services Authority (FSA) has unveiled a series of new rules governing home loans that will include a requirement for more stringent checks to be carried out on the ability of consumers to make their repayments.
With ultimate responsibility resting on the lender for establishing affordability, this could lead to legal cases where a potential repossession may be avoided by the finding that the provider of the mortgage did not fulfill this task properly.
Those faced with a residential property law case may wish to speak to a property lawyer.
Other changes in the FSA plans include abolishing self-certification mortgages and banning arrears charges when a borrower is already making payments towards these.
Commenting on the new regulations, mortgages channel manager at consumer website moneysupermarket.com Hannah-Mercedes Skenfield said: "Making lenders responsible for ensuring affordability requirements are met should not be a shock to the market."
"The shock is that the FSA have had to clarify this," she added.
Written by Anna Norton
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