Customers involved in sale and rent back (SRB) must be protected, according to the Financial Services Authority (FSA), which has unveiled tighter controls to achieve this.
Lesley Titcomb, FSA director responsible for the mortgage sector, said SRB is often used by those who want to sell in a hurry to stay in their home, so it is vital that they are better protected during what is usually a financially difficult period.
"With cases of vulnerable homeowners evicted from their homes after six to 12 months after selling to unscrupulous SRB companies, tighter controls were vital," she said.
Ms Titcomb added that it is wrong that arrears charges should be taken from customers already in difficult circumstances and trying to get their finances in order.
It follows the FSA's announcement that, from June 30th, SRB customers will be better shielded from firms using aggressive or unfair methods through the banning of exploitative advertising and high-pressure sales techniques, among other measures.
Posted by James Harrison