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Distressed book sales cause concern for FSA

The FSA has raised concerns over unregulated firms trying to buy up distressed UK mortgage books.

Recently, mortgage experts have warned that unregulated bodies, such as hedge funds, are able to buy up distressed mortgage books so they are left with no regulated legal owner, which would leave the FSA without any recourse if the owners decide to repossess properties on their books.

At the FSA mortgage sector conference last week, managing director for retail markets Jon Pain said: “We have already seen some books sold to unregulated firms and expect sales to increase as more wholesale-funded lenders struggle to manage their arrears. Our primary concern here is consumer protection and what happens when books are sold on.”

Former Edeus chief executive Michael Bolton says: “It is a disgrace that there are still unregulated businesses taking advantage of struggling homeowners. Those of us in this industry have been making it clear to the regulator for 12 months that this practice has been going on, so I welcome the FSA finally getting involved.”

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