As we reported last week, the financial regulator for the UK, the Financial Services Authority (FSA) released a report criticising mortgage lenders about the way they handle repossessions. The FSA also said it would take action where necessary if the lenders did not sort out their practices.
Lenders are reportedly annoyed that the regulator tarnished all lenders with the same brush and stated that the FSA should not have implied that all the mortgage lenders were to blame for such issues.
The initial report stated that lenders were using unacceptable working practices, including some unethical practices, with regard to repossessions and in some cases were too aggressive. In response, the FSA has said there were potential problems with all lenders, hence comments were aimed at all of them.
A spokesperson for the FSA said:
“There were issues discovered across the piece with all lenders which is why the warning was addressed to the whole market place.”
The Council of Mortgage Lenders official stated:
“The key message given to media and the industry was that lenders are failing to treat customers fairly. But in tarnishing the whole industry with the same dirty brush, is the regulator treating lenders fairly? To publish a report in such ambiguous terms is unfair and confusing for the majority of lenders who are making significant efforts to comply.”
The FSA maintains that all mortgage lenders do need to treat customers more fairly, in line with the regulators Treating Customers Fairly initiative, which delegates learn about in their CeMAP training. The FSA says the mortgage lenders need to be more helpful when customers fall behind with their repayments, monitor how customers are treated if bailiffs get involved and stop applying unfair charges to accounts.