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To ask the Chancellor of the Exchequer, what steps his Department is taking to (a) ensure vulture funds treat customers fairly; and (b) prevent the creation of mortgage prisoners through the sale of loan books to unregulated entities.
To ask the Chancellor of the Exchequer, what steps his Department is taking to (a) ensure vulture funds treat customers fairly; and (b) prevent the creation of mortgage prisoners through the sale of loan books to unregulated entities.
The FCA have advised that borrowers with inactive lenders, such as UK Asset Resolution (UKAR), are no less protected, when the legal title holder is regulated, than those with active lenders. The Government is also open to extending the Financial Conduct Authority’s (FCA) regulatory perimeter, but is yet to see evidence to suggest that there are borrowers that are currently being harmed by the current regulatory regime and that would therefore be helped by extending the FCA’s remit.
All sales of UKAR loans have included robust, non-negotiable protections to ensure the continued fair treatment of customers. These have included: adherence to the FCA’s Treating Customers Fairly (TCF) principles; its Mortgages and Home Finance: Conduct of Business (MCOB) rules; recourse to the Financial Ombudsman Service (FOS); and restrictions to the changes the buyer can make to standard variable rates (SVRs) for at least 12 months after the transfer of ownership. There have also been no changes to the terms and conditions of the loans which have been sold, and sales of UKAR loans have also not negatively impacted the ability of affected customers to re-mortgage elsewhere.
The Government has worked with the FCA to provide switching options for consumers with inactive lenders and will continue to support these customers where they would see genuine benefit from switching.
To ask the Chancellor of the Exchequer, what steps he is taking to help prevent the sale of mortgages to vulture funds.
To ask the Chancellor of the Exchequer, what steps he is taking to help prevent the sale of mortgages to vulture funds.
A mortgage prisoner is an existing borrower that cannot switch to a cheaper deal with a new lender because they don’t meet stricter borrowing criteria set by strengthened regulations post financial crisis. The Government is aware that these borrowers have been in a difficult and stressful situation. That is why we have worked closely with the FCA to implement their rule change to remove the regulatory barrier that has prevented some customers from switching.
I have written to Stephen Jones, Chief Executive Officer of UK Finance to outline my expectation that as many of its members as possible should move quickly to offer new deals to borrowers that are eligible to switch under the new FCA rules.
However, FCA data shows that some of these borrowers may be in problem debt and are therefore likely to exceed the risk appetite of many lenders, including those in arrears. As with any borrower in the UK that experiences problem debt, the Government and the FCA are committed to working alongside lenders to provide appropriate support for these individuals. That is why we have established a range of initiatives to support those in problem debt, including the Money and Pensions Service which has been set up by the Government to support consumers with free and impartial information for every stage of their financial lives. Treasury officials are also working on implementing Breathing Space which will give borrowers in problem debt the opportunity to get their finances back on track. We have also ensured that regulations concentrate on helping people avoid repossession, including protection in the courts through the Pre-Action Protocol which makes it clear that repossession must always be the last resort for lenders.
The sale of mortgage books is a commercial decision for lenders and the Government does not seek to intervene in these decisions.
I cannot comment on future UK Asset Resolution (UKAR) sales other than to say that a range of buyers, including active lenders, will be invited to participate and we will continue to require bidders to agree to our robust customer protections. In asset sales to date, we have not received a bid from an active lender that covered all of the portfolio on offer.
In all sales of UKAR loans, customer treatment is a key consideration for UKAR and the government in selecting a bidder and all bidders have to agree to UKAR’s customer treatment conditions in order for their bid to be considered. This is a strict requirement, not open to negotiation, and is considered before bids are assessed on price.
The purchaser is obliged to ensure the servicer of the mortgages is regulated by the Financial Conduct Authority (FCA). For the latest asset sale and future sales the legal title holder must also be FCA-regulated. This is a contractual requirement.
To ask the Chancellor of the Exchequer, what steps he will take to ensure that his officials contact existing vulture funds operating in the UK to ensure compliance with the new FCA regulations on mortgage prisoners.
To ask the Chancellor of the Exchequer, what steps he will take to ensure that his officials contact existing vulture funds operating in the UK to ensure compliance with the new FCA regulations on mortgage prisoners.
I am aware that customers who are unable to access cheaper mortgage deals are in a difficult and stressful situation. Taking action to remove unnecessary regulatory barriers that have prevented some customers from switching has been a priority for me and so I welcome the changes the FCA have made to their mortgage lending rules.
This change in the FCA’s rules should allow customers to switch to a new lender as long as they meet the lender’s risk appetite. This is determined by the lender and will take into account the circumstances of individual customers, which may include being up to date with their payments; not having significant other debt; and not being in negative equity.
Due to the uncertainty of lender’s risk appetites or the number of consumers who will choose to use the new switching opportunities, it is impossible to know precisely how many mortgage prisoners will be helped by the rule change until lenders are able to report progress to the Financial Conduct Authority (FCA).
Part of the FCA’s action to support mortgage prisoners is ensuring that borrowers, whose mortgage is currently held by an unregulated entity, are proactively contacted about this rule change. Inactive lenders and administrators acting for unregulated entities are now required to implement a communication strategy for relevant customers to inform them of the rule change within the next 10 months.
The FCA ran a consultation on the rule changes and thoroughly considered representations from various interested parties before implementing the changes in October. Most recently, I have met with Andrew Bailey, Chief Executive of the FCA, where we agreed to continue to collaborate and engage to support mortgage prisoners moving forward. In addition, I have met specifically with MPs for the All-Party Parliamentary Group on mortgage prisoners and numerous other MPs who, representing their constituents, have wished to discuss mortgage policy.
To ask the Chancellor of the Exchequer, what recent steps he has taken to enable mortgage customers who were trapped when their mortgages were sold to vulture funds to take advantage of lower interest rates; and if he will launch an inquiry.
To ask the Chancellor of the Exchequer, what recent steps he has taken to enable mortgage customers who were trapped when their mortgages were sold to vulture funds to take advantage of lower interest rates; and if he will launch an inquiry.
The Treasury recognises that mortgage prisoners can be in a difficult and sometimes stressful situation. However, the servicer of these mortgages must be regulated by the Financial Conduct Authority (FCA). This means that customers are protected by the FCA’s principle of Treating Customers Fairly; their Mortgage Conduct of Business rules; and customers have recourse to the Financial Ombudsman Service.
The Treasury has also worked closely with the FCA to consider how to remove the regulatory barriers that might prevent some customers from accessing better deals.
The FCA are now consulting on changes that will move the required affordability assessment from an absolute test to a relative one. This will enable lenders to more easily accept switching consumers, providing they are up-to-date with repayments and are not borrowing more.
The FCA consultation closes on 26 June 2019.
A debate on a Motion on Mortgage Prisoners and Vulture Funds has been scheduled for Thursday 6 June 2019. The debate has been initiated by Charlie Elphicke MP
A debate on a Motion on Mortgage Prisoners and Vulture Funds has been scheduled for Thursday 6 June 2019. The debate has been initiated by Charlie Elphicke MP
Ten minute rule motion for leave to bring in a Bill. Agreed to on question. Presentation and first reading (Bill 387). To be read a second time.
Ten minute rule motion for leave to bring in a Bill. Agreed to on question. Presentation and first reading (Bill 387). To be read a second time.
I beg to move,
That leave be given to bring in a Bill to make provision to enable consumers to transfer mortgages between providers; to prohibit the sale of mortgage debt to unregulated entities and the foreclosure of certain loans; to establish financial services tribunals; and for connected purposes.
This Bill makes...
I beg to move,
That leave be given to bring in a Bill to make provision to enable consumers to transfer mortgages between providers; to prohibit the sale of mortgage debt to unregulated entities and the foreclosure of certain loans; to establish financial services tribunals; and for connected purposes.
This Bill makes...
To ask Mr Chancellor of the Exchequer, pursuant to the Oral Answer of 17 November 2014, Official Report, column 49, what workarounds the Government is proposing so that Argentina can avoid technical default without paying vulture funds in full.
To ask Mr Chancellor of the Exchequer, pursuant to the Oral Answer of 17 November 2014, Official Report, column 49, what workarounds the Government is proposing so that Argentina can avoid technical default without paying vulture funds in full.
Securing the resolution of its sovereign debts is a matter for the government of Argentina. We encourage Argentina and its creditors to work towards a negotiated resolution.
The UK continues to actively engage in ongoing discussions to improve the operation of sovereign debt restructurings in international fora, including supporting the International Monetary Fund’s work on the contractual framework that has proposed new measures to reduce the power of holdout creditors in future debt restructurings.
My Lords, I am delighted to be able to act as sponsor of this Bill, which was passed in the other place yesterday, and I pay tribute to the Members in another place who worked hard to secure its passage there. In particular, Andrew Gwynne chose to put the Bill...
My Lords, I am delighted to be able to act as sponsor of this Bill, which was passed in the other place yesterday, and I pay tribute to the Members in another place who worked hard to secure its passage there. In particular, Andrew Gwynne chose to put the Bill...
My Lords, as anticipated by the noble Baroness, Lady Noakes, I confirm the Government’s full support for the Bill. I thank my noble friend Lady Quin for her leadership on the Bill here and her clear explanation of the rationale underlying it. The Government’s support for the Bill is motivated...
My Lords, as anticipated by the noble Baroness, Lady Noakes, I confirm the Government’s full support for the Bill. I thank my noble friend Lady Quin for her leadership on the Bill here and her clear explanation of the rationale underlying it. The Government’s support for the Bill is motivated...
My Lords, I thank noble Lords from all parts of the House who have spoken in this debate and who have so effectively given their support to the Bill. Support has come from the Cross Benches, the Liberal Democrats, the Official Opposition and in the words that have just been...
My Lords, I thank noble Lords from all parts of the House who have spoken in this debate and who have so effectively given their support to the Bill. Support has come from the Cross Benches, the Liberal Democrats, the Official Opposition and in the words that have just been...
My Lords, as we approach a general election in which there will be much emphasis on our own economic situation, we must not hide from ourselves or the electors we seek to serve the far more desperate situation of so many countries. We are very grateful to the noble Baroness...
My Lords, as we approach a general election in which there will be much emphasis on our own economic situation, we must not hide from ourselves or the electors we seek to serve the far more desperate situation of so many countries. We are very grateful to the noble Baroness...
My Lords, I thank the noble Baroness, Lady Quin, for introducing this Bill. We are now nearing the end of wash-up and we find ourselves with a rather odd Bill, which implements an international aid policy on which there is international agreement and on which the Treasury carried out a...
My Lords, I thank the noble Baroness, Lady Quin, for introducing this Bill. We are now nearing the end of wash-up and we find ourselves with a rather odd Bill, which implements an international aid policy on which there is international agreement and on which the Treasury carried out a...
My Lords, I am very grateful to be able to speak briefly in the gap and to follow the noble Baroness, who, along with her colleagues in the other place, has performed a valuable service to developing countries. She introduced this apparently uncontentious but important Bill, which has had a...
My Lords, I am very grateful to be able to speak briefly in the gap and to follow the noble Baroness, who, along with her colleagues in the other place, has performed a valuable service to developing countries. She introduced this apparently uncontentious but important Bill, which has had a...
Debt Relief (Developing Countries) Bill. Lords second reading debate. Agreed to on question. Committee negatived. Standing Order 47 having been dispensed with, the Bill was read a third time and passed.
Debt Relief (Developing Countries) Bill. Lords second reading debate. Agreed to on question. Committee negatived. Standing Order 47 having been dispensed with, the Bill was read a third time and passed.
I would like to start by putting it on the record that the Government fully support the Debt Relief (Developing Countries) Bill, introduced by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne). He has decided to introduce a serious and worthwhile measure, and I would like to...
I would like to start by putting it on the record that the Government fully support the Debt Relief (Developing Countries) Bill, introduced by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne). He has decided to introduce a serious and worthwhile measure, and I would like to...
The figure of £145 million that I quoted comes from the Treasury's own impact assessment and is the transfer from the creditors to the HIPC states. I quoted that figure because it is the Government's own estimate, rather than the £1.2 billion that the hon. Lady quoted.
The figure of £145 million that I quoted comes from the Treasury's own impact assessment and is the transfer from the creditors to the HIPC states. I quoted that figure because it is the Government's own estimate, rather than the £1.2 billion that the hon. Lady quoted.
I am delighted to have this opportunity to speak in support of the Bill. I start by offering my sympathy to the hon. Member for Denton and Reddish (Andrew Gwynne), a geographical neighbour of mine who, like me, serves part of the borough of Stockport. I wish him well. I...
I am delighted to have this opportunity to speak in support of the Bill. I start by offering my sympathy to the hon. Member for Denton and Reddish (Andrew Gwynne), a geographical neighbour of mine who, like me, serves part of the borough of Stockport. I wish him well. I...