1.4m home owners could have problems meeting mortgage repayments, according to the FSA’s recently published Financial Risk Outlook. This puts many more consumers at risk of having their homes repossessed. However the Consumer Panel is concerned that some consumers could lose their homes because lawyers and householders are largely unaware of the rules the FSA says must be followed before proceedings can be commenced.

The FSA’s rules say lenders must “treat customers fairly” and in particular:

• Lenders must make reasonable efforts to reach an agreement on repaying any arrears,
• adopt a reasonable approach to the timescale,
• not put excessive pressure on the customer,
• and repossess the property only where all other attempts to resolve the position have failed (Mortgage Conduct Of Business Rules 13.3.2; 13.5.3).

And in circumstances where a mortgage was mis-sold, we understand that the court can decide to stay possession proceedings whilst the Financial Ombudsman rules on the case.

John Howard, Chairman of the Financial Services Consumer Panel said:

"We have heard that some less scrupulous lenders are rushing to repossess properties without the courts considering the FSA rules on repossessions. And despite appalling stories of the misselling of mortgages, the sales tactics used are rarely taken into account in the court case. Clearly if a lender or mortgage broker has acted irresponsibly by persuading someone to take out a mortgage they cannot afford, a much more lenient view ought to be taken of the householder’s case."

– ends –

MEDIA ENQUIRIES