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FSA tells lenders to be fair with troubled borrowers
7 August 2008 10:30
Some lenders are resorting too easily to repossessions when their customers fall into arrears, according to a new review by the Financial Services' Authority (FSA).
Studying the actions of 13 mortgage providers over the past few months, the FSA found that they could have taken the individual circumstances of troubled borrowers into account more, as well as offering more routes through which to resolve arrears problems.
It was particularly critical of the specialist lenders it looked at, accusing them of adopting a 'one size fits all' approach, of resorting too easily to court action and of having substandard systems in place for controlling its arrears handling process.
FSA director for mortgage Leslie Titcomb therefore stressed the importance of lenders treating their customers fairly in present economic conditions, making it imperative that they first explore alternative solutions to repossessions.
Citizens Advice welcomed these findings, which it claimed mirrored its own, before urging the FSA and the government to respond by tightening up the rules currently in place on mortgage arrears and lending practices.
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