The Financial Services Authority (FSA) is the regulator for the mortgage industry, as those who undergo CeMAP training will discover.
Earlier this week, the regulator stated that it had reviewed a cross-section of mortgage contracts to review if lenders were interpreting the FSA’s statement of good practice regarding mortgage exist administration fees, as issued in January last year.
The FSA said:
“We found about a third of the sampled firms have terms in their mortgage contracts that allow them to vary their charges which, in our view, does not comply with the law and principles set out in the statement and so may be unfair.”
The FSA has said it will now write to those firms whose mortgage contracts contain, in its opinion, unfair terms.
The FSA said:
“We expect them to amend or delete the terms in new contracts and not rely on them in contracts with existing customers. If necessary, we will take further regulatory action. We will continue to monitor closely whether firms’ terms comply with the law and principles set out in the statement. Should it come to our attention that a firm’s terms do not comply, we will consider the extent of the breach and what appropriate regulatory action to take. This may include, if sufficiently serious, enforcement or court action.”
