Banks warned to urgently review repossession tactics as 45,000 people face losing the

[Legal Beagles]

The City watchdog warned mortgage lenders today to treat customers in arrears fairly or face action from the regulator.

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[Amy]

Re: Banks warned to urgently review repossession tactics as 45,000 people face losing

Does nobody know what a split infinitive is? Jesus Johnny, I have to wonder, I really do.

[Legal Beagles]

Regulator tells lenders to adopt reasonable repossession policies


The Financial Services Authority yesterday warned 250 mortgage lenders that they faced disciplinary action if they breached rules on how to deal with borrowers facing difficulties with repayments.
In its second warning in three months, the City regulator demanded a review of their policies by the end of January and outlined how customers in difficulty should be handled.
The letter to the chief executives of the lenders outlines the approaches that should be taken. These include:
• giving customers a "reasonable amount of time" to pay;
• within 15 days of a borrower falling into arrears, a lender should provide them with an FSA fact sheet and details of the total sum of the shortfall, any charges incurred and the total debt;
• before action to repossess, customers must be alerted that they can contact their local authority to see if they are eligible for rehousing;
• lenders must not make excessive phone calls outside the hours of 8am and 9pm;
• repossessed properties must be put on the market as soon as possible and obtain the best price that might be "reasonably paid";
• the FSA would have "serious concerns" about lenders appointing a receiver without a court order.
Jon Pain, managing director of retail markets at the FSA, said: "Conditions in the mortgage market are difficult and it seems likely that these conditions will persist for some time. In such a challenging operating environment it is particularly important for senior management to ensure the fair treatment of customers, including when they go into arrears".
The Council of Mortgage Lenders has admitted that by the end of September 168,000 borrowers are at least three months behind on repayments and more than 30,000 homes had been repossessed.
The FSA warned lenders in August that they already had work to do and now warns that if lenders are not complying "we will make appropriate and properly targeted use of our existing regulatory tools which may include enforcement action".
Alistair Darling made it clear in the pre-budget report that lenders would be required to give customers at least three months grace before repossessing homes and yesterday the CML was at pains to argue its members were aware of the pressure upon them.
Michael Coogan, director general of the CML, said: "Borrowers facing difficulty deserve to know that their lenders have the right measures in place to treat them fairly and try to help them keep their homes wherever this is an achievable outcome. That is why we and our members have been working on a voluntary basis to the same goals as the FSA in this important area."

• UK banking sector
• Mortgage lending figures
• Regulators
• Banks and building societies
• Mortgages

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