Experts surprise at FSA mortgage arrears plan

Lenders and advisers are surprised at the Financial Services Association (FSA)’s one-size-fits all proposal for mortgage arrears and Peter Williams, Intermediary Mortgage Lenders Association (IMLA) executive director, said all IMLA members followed the 13 Mortgage Conduct of Business rules and regulations as set out by the FSA.

Williams told the Financial Times that meant members were treating borrowers in difficulty as sympathetically as possible. ‘Particularly in troubled times when arrears are mounting, it is in the interests of all parties to find an effective solution to overcome homeowners’ problems,’ he said.

FSA has been urging mortgage lenders to ensure they treat customers fairly in the current market conditions as its latest review found weaknesses in the way some were handling arrears and repossessions – particularly for consumers with impaired credit histories.

New FSA data on mortgage lending reveals the number of consumers facing arrears and repossessions, while historically low, is increasing. It also shows lending to customers with an impaired credit history accounted for 2% of overall new lending during the first three months of 2008.

Further reading:

Read the Financial Times story