The FSA has announced measures to assist borrowers who fall into arrears and confirmed that mortgage advisers and those arranging non-advised sales will be individually accountable to the regulator.
The measures follow on from October 2009 Mortgage Market Review and work carried out by the FSA which uncovered worryingly high levels of consumer detriment especially in the specialist lending sector.
In the consultation paper published today, the regulator says it will require firms not to add early repayment charges on arrears charges and interest levied on those charges.
Firms must not apply a monthly arrears charge where the firm and the customer have agreed an arrangement to repay the arrears, and they must record all arrears handling telephone calls and keep all records for three years.
The FSA will convert its current forbearance guidance into rules, so that firms must consider all options for borrowers, making repossessions the last resort. Measures also confirm that payments by customers in financial difficulties must first be allocated to clearing the missed monthly payments. See the library at http://www.fsa.gov.uk/ for full details
