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Lenders issued with deadline to prove fairness

January 14, 2009 by admin  
Filed under News, News-Loans

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The UK’s financial regulator, the Financial Service Authority, has been contacting lenders that deal with home loans, and has advised them that they have a deadline by which they must prove that they are exercising fairness when it comes to their customers. Lenders will have to prove that customers that have arrears or are facing repossession are being treated fairly, and they have until the end of January to prove that this is happening.

Lenders have been told that they have to review their policies on arrears, and that they must make necessary amendments and changes to ensure that they are complying with fairness regulations.

An official from the Financial Services Authority stated: “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.”

Under the fairness regulations lenders will have to ensure that their policies allow for borrowers to have reasonable time to repay their arrears, and that they are given information about alternatives and other places where they may be able to get assistance and advice on their situation. Rather than rushing into repossession proceedings, lenders will now have to provide written proof that they have undertaken all other reasonable steps, and the procedures will need to be a part of their written policies.

An official 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.”

Tags: Arrears, mortgage, deadline, loan, fairness, loan afirness, fsa

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