Mortgage lenders and administrators have been warned that they will risk punishment if they do not make sure that customers in arrears are being treated fairly.
The Financial Services Authority (FSA) has written to mortgage firms to warn them that they must make sure all of their customers in arrears are being treated fairly - or they will face "enforcement action".
Every mortgage lender and administrator has been sent a letter, which sets a deadline of January 31st and will be the second FSA warning they have received in the last few months. The FSA has been concerned that some firms are not being fair with customers in arrears or facing repossession, a subject that has come under scrutiny because of the problems in the housing market.
The letter, from FSA retail managing director Jon Pain, read: "Conditions in the mortgage market are difficult and it seems likely that these conditions will persist for sometime. In such a challenging operating environment it is particularly important for senior management to ensure the fair treatment of customers, including when they go into arrears."
Repossessions have come under scrutiny recently, with the government urging lenders to use them only as a last resort. The FSA wants all lenders to comply with its requirements or they will risk punishment.
Lenders will be expected to review their current policy on arrears and their management practices and procedures. After doing this, they should assess whether customers are being treated fairly using a sample of cases.
