In a joint letter to Housing Minister Grant Shapps, the charities are supporting the FSA's proposals to introduce affordability and income checks. Failure to stamp out reckless lending for good, say the charities, would be a missed opportunity and potentially a costly mistake.
They add that it is vital that the government does not allow a return to the soft-touch regulation of the past that devastated the housing market and put thousands of homeowners on the brink of homelessness.
Citizens Advice chief executive Gillian Guy said: "Bureaux saw 115,000 problems last year relating to mortgage and secured loan arrears and see countless ongoing problems resulting from vulnerable borrowers given mortgages they could never have afforded to pay from the outset or once the discounted periods ended.
"These proposals are about the FSA ensuring that mortgage lenders and borrowers take proper care to consider whether a mortgage is affordable and sustainable over time before entering in it."
Kay Boycott, director of campaigns, policy and communications at Shelter, said: "From our research we know that millions of people are already struggling with their mortgage payments and every two minutes someone faces the prospect of losing their home. We urge the government to support the FSA's proposals to ensure we prevent even more people from living on a knife edge."
