FSA reiterates call for firms to treat customers fairly
6th August 2008
The UK Financial Services Authority has reiterated its call for mortgage lenders to ensure that they are treating customers fairly in the current market conditions as its latest review finds weaknesses in the way some lenders are handling arrears and repossessions, particularly for consumers with impaired credit histories.
The review is the latest stage in the Financial Services Authority's (FSA's) ongoing program of work designed to monitor the effectiveness of its regulation of mortgage lending and ensure that consumers are treated fairly and can make informed decisions.
This latest warning comes as new data on mortgage lending from the FSA shows that the number of consumers facing arrears and repossessions, while historically low, is increasing.
Set against a background where the level of new residential lending by FSA regulated firms has declined from a peak of GBP102 billion in the third quarter of 2007 to GBP75 billion in the first quarter of 2008. The data also shows that lending to customers with an impaired credit history accounted for 2% of overall new lending during the first quarter of 2008.
Lesley Titcomb, director responsible for the mortgage sector at FSA, said: "As our data shows in these current market conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be the last resort."