SYH Charterhouse, an arranger of FSA-regulated home reversion plans, has urged homeowners who find themselves in financial difficulty not to be taken in by so called ‘mortgage rescue’ companies.

SYH argued the unregulated firms target the financially vulnerable with sale and rent back schemes which do not offer secure tenancies and tender prohibitive terms and conditions designed to lead to eviction.

It said many companies purchase properties for up to 60% below market value and generally give no security to the occupier beyond a six to 12 month tenancy.

Michael Holt, managing director of SYH Charterhouse, said: “The impact of these unscrupulous parts of the industry should not be underestimated and the devastating effect they have on the lives of people who are struggling with debt, trying to keep up with their mortgage repayments, or facing having their property repossessed should not be downplayed.

“We welcome the fact that the OFT intends to investigate the sector but urge all consumers looking to unlock the wealth tied up in their properties to ensure that they go to a reputable and regulated home reversion provider that has safeguards in place to prevent them from being exploited. People’s homes are an emotive subject and customers in financial difficulty should not be losing out twice.”

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