Home Loan industry welcome FSA review
We reported earlier this week that the Financial Services Authority (FSA) were launching an investigation into the practices adopted by major lenders with regard to repossessions of their customers houses following home loan arrears. The FSA were concerned that many lenders were too eager to repossess a property, particularly in the current economic climate and that lenders’ policies may not comply with the regulator’s “treating customers fairly” ethic.
Since the announcement last week, several lenders have been quick to defend their repossession policies, stating that they had adequate and sympathetic procedures in place for dealing with arrears.
A spokesman for the Woolwich commented that they had one of the lowest repossession levels within the industry, but were still working closely with the FSA in order to establish some common guidelines.
The Britannia Building society also made similar comments, saying it had robust arrears procedures, which combined with an excellent level of customer service meant that they could help those borrowers who are struggling with their repayments in a positive and flexible manner. Their spokesman also said “it is, however, important that we also distinguish between those members who are experiencing difficulties and can’t meet their monthly payments, compared to those who simply won’t pay. For the latter it is important that we take swift, firm action.”
The FSA have already commenced their investigation and expect to reveal their initial findings by mid summer this year. Most lenders seem confident that they have appropriate systems in place to deal with the problem of arrears. If the FSA are not happy with their findings however, they are then likely to take formal action against any lenders who they feel are not treating their customers fairly, which would be handled by the regulators enforcement department. We await the results with interest!
