Treasury Committee outlines terms of reference for inquiry into mortgage arrears and access to mortgage finance

Continuing its examination of the ramifications of the banking crisis, the Treasury Committee has decided to undertake a short inquiry into mortgage arrears and access to mortgage finance.

• the current number of homeowners in mortgage arrears and forecasts for the trend in mortgage arrears over the medium-term
• the number and characteristics of homeowners who have had their properties repossessed, the number in the process of having their homes repossessed,  as well as forecasts for the trend in repossession levels over the medium-term
• the treatment by, and the approaches taken, by mortgage lenders towards homeowners in arrears and/or at risk of repossession, including issues relating to the treatment of homeowners by financial institutions specialising in mortgage lending to sub-prime borrowers
• adherence to, and the effectiveness of, Financial Services Authority (FSA) rules and guidance for mortgage lenders on repossession policy and treatment of consumers in arrears as well as the FSA's regulatory approach in this area
• adherence to, and the effectiveness of, codes of conduct, protocols and statements of good practice issued by industry bodies in this area
• issues of concern around the operation of sale and lease-back schemes
• the success of those Government schemes in existence before the financial crisis to support homeowners facing difficulties with mortgage payments and/or at risk of repossession, as well as the effectiveness of initiatives introduced since the financial crisis began; and
• the impact of the credit crunch on access to mortgage finance and the terms on which such finance is offered for first time homebuyers. 

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