Lenders told to meet fairness deadline

UK lenders that deal with borrowers taking out home loans have been issued with a warning from the UK’s financial regulator with regards to how they treat customers that have arrears or may be facing repossession. The FSA has contacted lenders that deal with these loans, stating that they have a deadline by which they must prove that they act fairly towards these borrowers.

Lender have until 31st January to prove to regulators that they are acting fairly towards those in arrears and facing repossession, and they must reflect this in their written policies. In the meantime, lenders are being told to change and amend their policies to ensure that fairness is exercised to those in this situation.

One official from the FSA said: “Conditions in the mortgage market are difficult and it seems likely that these conditions will persist for sometime. In such a challenging operating environment it is particularly important for senior management to ensure the fair treatment of customers.”

A spokesperson from the Building Societies Association said: “With arrears forecast to increase over 2009, it is essential that all lenders ensure that their arrears and repossession policies treat customers fairly. Building societies want their borrowers to remain in their homes if they have repayment difficulties, and genuinely view repossession as a last resort.”