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27 January 2010
The Financial Services Authority (FSA) is proposing to `clamp down` on the charges mortgage lenders levy on customers who have fallen behind with payments to their mortgage debt, The Independent reports.
The City watchdog is also stressing that lenders `must only consider repossessing a home as a last resort`.
The proposals come after the FSA uncovered - last summer - `problems with the way specialist lenders and third-party administrators` were dealing with homeowners who had fallen behind with their mortgage payments.
Under the proposals, firms will no longer be allowed to:
In addition, any payments that consumers make towards their debt must be allocated to repaying their arrears first - before they are used to cover charges/fees.
The Director of the Small Firms and Contact Division for the FSA, Lesley Titcomb, said: "Today`s proposals underline the standards that firms must meet and will help to ensure that homeowners in financial difficulties are treated fairly.
"Lenders need to be in no doubt of their obligations to customers who fall behind with payments."
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