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FSA pulls the plug
The FSA has acted to shut down the "sale and rent back" market because it felt the deals on offer by lenders were "unaffordable or unsuitable and never should have been sold". There were some sale and rent back schemes have targeted financially distressed homeowners including those facing repossession, allowing the businesses to purchase homes at knockdown prices. The FSA said that some firms had not "correctly assessed appropriateness and affordability".
The mortgage deal allows a purchaser to buy a home and rent it back to the original owner. There was also a concern that some were perhaps "more focused on their own commercial success rather than their customers' welfare".
The FSA have also noted that at least one of the 22 companies involved in the deals have been found to have engaged in fraud, the other companies have stopped taking on any new business. Five have agreed to undertake reviews of past business. The FSA said these could result in "consumer redress".
Those concerned over sale and rent back deals they have should contact their provider in the first instance or seek professional advice. The regulator said it would be working with the companies reviewing historical work to ensure customers are treated fairly.
The information contained within these news articles may include reference to taxation, legislation, regulation and other issues or concerns that may no longer apply.
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