The FSA (Financial Services Authority) has criticised mortgage lenders for how they have been handling matters in relation to repossessions and arrears.
According to reports from the FSA, mortgage lenders have performed immaturely when handling customers with a poor credit history. As mentioned in earlier articles, there has been a hige increase in the number of house repossessions this year, which has also decreased the number of home loans requests. The FSA stated that the total sum lent as part of residential mortgages was at 102 billion pounds but has now slowed down to as little as 75 billion pounds.
Considering the current ‘credit crunch’ crisis, the FSA has asked all mortgage lenders to adopt a more mature outlook when dealing with those who are finding it difficult to discharge financial obligations. The FSA has also requested that the only resort to legal action as a final resort when all other options have been exhausted.
The FSA has also requested that customers take advice from a financial consultant, either a mortgage advisor or financial advisor. In order to implement their own TCF (Treating Customers Fairly) guidelines, the FSA claims there will be severe action on those found guilty of not following the regulations properly.
According to the FSA, the majority of culprits are small specialist loan providers. It states that many firms have a poor system in place to educate people adequately about the pros and cons of a particular home loan or mortgage. It has requested that loan providers look at more flexible repayment options and ensure that any future procedures adopted are fair enough.