Overview

This bill mandates a public inquiry into the circumstances surrounding the creation of "mortgage prisoners"—homeowners unable to switch to better mortgage deals despite making timely payments—and their subsequent consequences. The inquiry will investigate the roles of various government bodies and financial institutions in this situation.

Description

The bill directs the Secretary of State to establish a public inquiry. This inquiry will investigate:

• Government and Regulatory Actions: The actions of the Government, the Financial Conduct Authority (FCA), and the Financial Ombudsman Service (FOS) leading to the creation and treatment of mortgage prisoners. This includes scrutinizing negotiations, assurances (or lack thereof) given to purchasers of mortgage loans during the 2007/08 financial crisis, and assessments of the impact on mortgage holders.
• Mitigation Attempts: Any attempts to mitigate the negative effects of the mortgage sales on homeowners.
• Executive Compensation: Whether executives of UK Asset Resolution were rewarded for the sale of these mortgages.
• Financial Impact: The financial benefits (gross and net) to HM Treasury from the sale of the mortgages.
• Impact on Mortgage Prisoners: The inquiry will assess the impact on mortgage prisoners, including their numbers, financial situations, and prospects for relief.
• FCA and FOS Roles: The roles of the FCA, including its policies and supervision, and the FOS's handling of complaints.
• Harm Quantification: The extent of harm caused to mortgage prisoners by the actions of various entities.
• Recommendations: The inquiry will have the power to make recommendations.

The inquiry will operate under the provisions of the Inquiries Act 2005. The bill applies to England, Wales, Scotland, and Northern Ireland.

Government Spending

The bill itself does not specify direct government spending figures. However, the cost of conducting the public inquiry, including the fees paid to inquiry members, legal representation and other associated costs will add to the existing government budget.

Groups Affected

The main group affected are mortgage prisoners themselves. The inquiry's findings could lead to potential financial relief or changes in policy impacting their financial situations. The inquiry will also examine the roles of the government (including HM Treasury, UKFI, UKGI, and UKAR), the Financial Conduct Authority (FCA), and the Financial Ombudsman Service (FOS), all of whom may face scrutiny and potential recommendations for policy changes.

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