Mortgages: Cerberus

Lord Wrigglesworth Excerpts

Wednesday 28th November 2018 Lords Chamber

[Lord Bates]

It is a major issue. The average size of the mortgage held under UK Asset Resolution is around £120,000. People find themselves in these very difficult situations, but we are bound by the rules as they are. There will be some opportunity to offer a little bit of flexibility when the credit directive has to be onshored into UK legislation. There will be that opportunity, within tight limits, to look again at some of these aspects, and of course we will do that to the full with the FCA.

[Lord Wrigglesworth (LD)]

The mortgage prisoners that have been created by this deal between UK Asset Resolution and Cerberus are seeking to get further mortgages. Cerberus gave an undertaking when it bought this package of mortgages that they would be allowed to do so. Is the Minister saying that Cerberus is helping these people to get the lower mortgages that are available and to stop being imprisoned in the deal that was done at the time? Will UK Asset Resolution also ensure that if any future mortgages are sold off, the undertakings given will be upheld?

[Lord Bates]

My Lords, I will not go into the technical detail, but one of the conditions for Cerberus to operate in this country was that it operate under a regulated body, so it operates under Landmark Mortgages. It is not active in the lending market, so the people who can move to get the better deals are those who are up to date with their payments, have equity in their property and can meet the new affordability test. That is the conundrum that we are seeking to find a way through.