Protective measures for mortgage holders in arrears

Date:Wednesday 27th January 2010
Author: Max Freedman

Mortgage holders who have found themselves in arrears are to receive better protection with the introduction of new measures.

The Financial Services Authority (FSA) has announced it is to strengthen the rules that govern dealing with arrears to make sure that mortgage holders in difficulties are treated fairly.

Key proposals from the body include making it clear that lenders cannot add early repayment charges on to arrears charges and to only consider repossessing a property as the last resort.

Lesley Titcomb, the FSA director responsible for the mortgage sector, said: "Lenders need to be in no doubt of their obligations to customers who fall behind with payments and must realise that such circumstances are not an opportunity to create further profits."

Last month, the FSA published mortgage lending data which showed that the total amount of outstanding loans in the third quarter of 2009 stood at £1.2 billion, a one per cent increase on the previous year.