FSA warns lenders to treat mortgage customers fairly

Mortgage lenders have been warned that they must ensure customers struggling to make payments and facing repossession are treated fairly.

The Financial Services Authority (FSA) has outlined in a letter which it sent to all UK lenders that if their customers are not receiving adequate treatment by January 31st, it will impose regulatory enforcement action.

FSA retail managing director Jon Pain wrote: "Conditions in the mortgage market are difficult and it seems likely that these conditions will persist for sometime."

He added that it is important for senior management to ensure customers are treated fairly at all times during the current "challenging operating environment", even when they go into arrears.
This follows Alistair Darling's announcement in his pre-Budget report that struggling mortgage customers facing repossession should be given a three-month period of grace before proceedings are initiated by lenders.

Moreover, the chancellor urged lenders that repossession should be carried out only as a last resort where other options such as adjustments to payment terms have been exhausted.

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