New rules for lenders handling mortgage arrears

| June 25, 2010 | 0 Comments

The Financial Services Authority (FSA) has published new rules aimed at protecting vulnerable customers in arrears on their mortgages.

From 30th June, homeowners in arrears must be treated fairly by lenders and the following key areas have been confirmed:

Firms must not apply a monthly arrears charge where an agreement is already in place to repay the arrears.

Payments by customers in financial difficulties must first be allocated to clearing the missed monthly payments, rather than to arrears charges, which can be repaid later.

Lenders must also consider all options for borrowers and repossessions should always be the last resort.

Furthermore, a new rule has been introduced requiring banks and building societies to record all arrears handling telephone calls and to keep the records for three years.

The FSA’s director responsible for the mortgage section, Lesley Titcomb, says: “It is wrong that arrears charges should be taken from customers already in difficult circumstances and trying to get their finances back on track.”

She adds: “Today’s rules make absolutely clear the standards we expect of firms, and we have already taken tough action against some of the worst offenders.”

The regulator has today also confirmed its plans to make all mortgage advisers and those who arrange non-advised sales personally accountable.

Tags: , , , ,

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 3225 times, 2 so far today