People in debt ‘suffering poor practice by specialist lenders’

Mortgage owners struggling to make payments on their houses may be the victims of irresponsible lending and other discrepancies, recent research has suggested.

The Financial Services Agency (FSA) referred four specialist providers and third-party administrators (TPAs) for further investigation after a report showed problems in their handling of arrears and repossessions.

Lesley Titcomb, director responsible for FSA’s mortgage sector, said: “It is vital that firms treat customers who get into arrears fairly. It is unacceptable that some firms are applying fees unfairly and pushing customers towards repossession without considering alternatives.”

Specialist lenders and TPA arrears-handling processes would continue to be monitored closely, she added.

Areas of bad practice included an aggressive pursuance of debt regardless of the personal circumstances of those in debt and imposing excessive and unreasonable charges.

Earlier this month, property expert Malcolm Harrison advised people getting behind on their mortgage repayments to approach their lenders and seek different arrangements.

By Francis Finch

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