Regulator has some arrears concerns

Friday 23 April 2010 13.13
Regulator has some arrears concerns

The Financial Regulator is to review how some mortgage lenders charge homeowners who are in arrears with their repayments.

This follows an inspection carried out last year, which looked at how financial institutions deal with home repossessions and people in arrears.

The regulator said the inspections highlighted concerns about charges such as surcharge interest fees and arrears management fees. There were also concerns about the high level of contact some firms made with customers in arrears, and with how quickly some lenders began legal action to repossess homes.

The regulator noted, however, that traditional banks and building societies had better practices in place for dealing with these issues than other lenders, with none applying extra arrears charges on consumers.

The Code of Conduct on Mortgage Arrears was amended earlier this year to give those in arrears up to 12 months before proceedings can start.