Over the past couple of years, with the credit crunch, recession, and pay freezes affecting so many households, a rising number of homeowners have fallen behind with repayments on their mortgages, and for many this has resulted in the loss of their homes through repossession.

The level of repossessions in the UK soared to such a point that the government has been trying to take action by putting measures into place to try and reduce the level of repossessions.

It has now emerged that the UK’s financial regulator, the Financial Services Authority, has proposed new regulations that could provide increased protection for homeowners that are in arrears with their mortgages.

The FSA has stated that is wants to ensure that homeowners that have fallen into arrears get fair treatment from lenders, and in particular this applies to those that have had to borrow money from specialist lenders.

Part of the new proposals from the FSA include ensuring that homeowners that are not hit with unfair and unnecessary charges by lenders as a result of being in arrears.

The regulator also wants to make sure that repossession action is only taken as a last resort by lenders after all other options have been looked at.

The proposals come as part of a review that the Financial Services Authority has been carrying out into the workings of the mortgage market in the UK. This came after earlier research that indicated some homeowners in arrears were being treated aggressively by lenders.

The FSA stated: “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 and must realise that such circumstances are not an opportunity to create further profits.”

Leave a comment