News
New rules for lenders handling mortgage arrears
The Financial Services Authority (FSA) has published new rules to protect vulnerable customers in arrears on their mortgages.
With immediate effect, homeowners in arrears must be treated fairly by lenders and the following specific areas have been itemised:-
1.
Firms must not apply a monthly arrears charge where an agreement is already in place to repay the arrears.
2.
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.
3.
Lenders must also consider all options for borrowers and repossessions should always be the last resort.
Also, a new rule has been introduced that requires banks and building societies to record all arrears handling telephone calls and to keep the records for three years.
According to the web site Finance markets.co.uk, Lesley Titcomb,who is the FSA’s director responsible for the mortgage section, said: “It is wrong that arrears charges should be taken from customers already in difficult circumstances and trying to get their finances back on track.”
“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 also confirmed plans to make all mortgage advisers and those who arrange non-advised sales personally accountable.
Post a Comment on this News Article.