Warning issued to anyone who is struggling to pay their mortgage

THE FINANCIAL CONDUCT AUTHORITY HAS WARNED HOMEOWNERS TO 'BE AWARE' PHOEBE JOBLING Property Writer and VICKY SHAW PA PERSONAL FINANCE CORRESPONDENT 18:03, 30 May 2025 Mortgage

holders struggling with their repayments are being cautioned against falling for fraudulent claims about legal loopholes and conspiracy theories suggesting they can't be held

accountable for their debts. The Financial Conduct Authority (FCA) has warned those facing financial hardship and who are at risk of losing their homes to be wary of misleading claims that

they aren't legally obligated by their mortgage contract. Instead, the FCA is encouraging struggling borrowers to speak with their lenders, who may be able to provide various support

options. The FCA has revised its consumer web pages to alert individuals about false and damaging information. The regulator has noted instances of mortgage holders in financial distress

being misled by online misinformation, often resulting in severe financial repercussions. Such claims might reference arguments from as far back as the Magna Carta and could also be applied

to other forms of debt or taxes. Article continues below In an effort to prevent repossession of their homes, some mortgage holders may end up paying a fee to others to take their claims to

court. However, not only could these attempts prove unsuccessful due to the claims' lack of legal validity, but people could also risk losing a significant portion of their home equity

(the difference between the outstanding mortgage balance and the property's value), according to the FCA. This is attributed to increased costs associated with repossession, legal fees,

and the potential impact these activities could have on their property values. Homeowners on the brink of losing their properties may still receive assistance from their lenders in selling

their homes. This option allows any remaining funds from the sale to be preserved, rather than being drained by costs associated with repossession, arrears, and legal fees. Greg Sachrajda,

the head of department in retail banking market interventions at the FCA, warned the PA news agency: "There is a risk that people who are in financial difficulty, and at risk of risking

losing their home, are particularly susceptible to arguments that make things sound better." Sachrajda cautioned: "If something seems too good to be true, it usually is." He

further emphasised: "If you borrow money, you're required to repay it, and you only make the situation worse by trying to rely on false arguments which the courts are

rejecting." The FCA acknowledged the desperation of those struggling with their mortgages, but Sachrajda noted that the situation could indeed worsen. "We know people are desperate

and can be struggling with their mortgage, and they may feel that things can't get any worse. But the reality is that unfortunately they can get worse," he said. The organisation

has witnessed instances where homeowners not only lose their homes but also receive reduced proceeds from the sale. This is often due to lenders incurring additional costs, which are

subsequently passed on to the consumer. However, Sachrajda stressed that genuine support is available, urging: "Our message to consumers is: 'Don't fall for these false,

misleading arguments but instead speak to your lender who can help with real options to make things better.'" He emphasised that lenders have a duty to handle cases of financial

hardship with sensitivity and fairness.# There are measures available that can help homeowners avoid repossession, such as extending the mortgage term, temporarily switching to an

interest-only mortgage, or arranging a payment holiday. In certain cases, it might be necessary to sell the home, he noted, adding: "But even then they can help, because many lenders

offer what we call an 'assisted voluntary sale' and that essentially gives the borrower more time to sell the property and the lender can help with both the costs of that process

and also how to navigate the sales process to make that easier. "And that can then help maximise the amount of money the customer makes from the sale." Mr Sachrajda also

recommended reaching out to reputable services for free assistance. Free support is available from organisations such as the National Debtline (operated by the Money Advice Trust),

StepChange, Citizens Advice, and the Government-endorsed MoneyHelper service. A representative for UK Finance, the banking and finance industry association, warned: "Struggling with

mortgage payments can become overwhelming, however it's important to beware of advice circulating online which could put your home and finances at serious risk. Article continues below

"It's always worth seeking independent legal advice before acting on information you find online, as understanding your legal position fully will help protect you from costly

mistakes. "If you're struggling with mortgage payments it's important to speak to your lender as early as possible, as they'll be able to offer a range of tailored

options to help you. Lenders have dedicated teams who can work with you to find a way forward – whether that's adjusting repayment plans or exploring alternative solutions."