Criticism for mortgage firms as repossessions rise

23/06/2009

Mortgage lenders are still not treating customers fairly and are moving too quickly to begin repossession actions.

This is the claim of the Financial Services Authority (FSA), which announced yesterday that some mortgage firms were "breaching" industry rules.

Some lenders were slammed for being too ready to go to court to get homes back from struggling borrowers and for charging "unfair" fees.
The property market slump, credit crunch and recession has made it harder for many to make ends meet.

As a result, repossessions rose from 27,000 in 2007 to 40,000 last year - and the Council for Mortgage Lenders said this week that it expects 2009's total to hit 65,000.

Lesley Titcomb, FSA director responsible for the mortgage sector, said: "In current market conditions, with our data showing more people struggling to meet their mortgage payments, it is vital that firms treat customers who get into arrears fairly.

"It is unacceptable that some firms are applying fees unfairly and pushing customers towards repossession without considering alternatives."

The FSA said that it would now be investigating four UK lenders for breaches of lending rules and warned that others risked being put under the spotlight in future.

Tags; Housing Debt and Bills, Young Family Finances,

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