FSA takes aim at ‘sub-standard’ mortgage lenders

The Financial Services Authority (FSA) has singled out a number of mortgage lenders from around the UK whose practices it deemed to be sub-standard, it has been revealed.

Many British consumers have found themselves facing serious debt management difficulties after borrowing money to buy a home and the FSA suggests that in some cases lenders were aware of the financial risks posed to their customers.

Indeed, a recent investigation by the authority concluded that measures used to assess the affordability of particular mortgage deals need to be improved across the mortgage sector.

“We found some firms willing to offer mortgages they know to be unaffordable,” Stephen Bland, the FSA’s retail intermediary sector leader, made clear.

“Overall there is a need for a big improvement in senior management’s use of management information to help achieve the fair treatment of their customers to achieve the progress we and the industry as a whole want to see,” he added.

The Council of Mortgage Lenders recently predicted that the number of house repossessions resulting from debt management problems will increase next year.