MPs commit to finding solutions for mortgage prisoners

During an evidence session, Rushanara Ali, member of the Treasury Committee, questioned Glen about borrowers who are unable to remortgage or find a lower interest rate due to changes in legislation.

In his letter, Glen acknowledged that “these borrowers find themselves in difficult circumstances”, and committed to exploring potential solutions.

Glen said "better deals should not be beyond the reach of customers who are continuing to pay their mortgage".

He praised the FCA for "taking advantage of the flexibilities it had" under MCD to ensure that lenders can continue to waive affordability requirements for remortgagors who were not increasing the size of their debt.

Glen said the focus needed to be on helping those who have mortgages with inactive lenders, and Nicky Morgan agreed that "time is of the essence".

Morgan said: “The Economic Secretary has acknowledged that mortgage prisoners are in a difficult and stressful situation, and the FCA has said that helping mortgage prisoners is a matter of urgency.

“Time is clearly of the essence. People are trapped repaying their mortgages on a far higher interest rate than is necessary through, as the Economic Secretary said, no fault of their own.

“Whilst the FCA has said it can help a few thousand mortgage prisoners – those with authorised lenders – this does nothing to help the 140,000 customers with inactive lenders.”

Rushanara Ali added: “The Government and the FCA have found an answer for customers of active firms. They must now be bold and innovative in finding a swift solution for mortgage customers of inactive firms.

“The Committee will continue its work on this and keep a watchful eye on the Government and regulator’s actions.”