Responding to the FCA’s decision to consult on mortgage payment shortfall remediation guidance, Paul Broadhead, Head of Mortgage Policy said:
The FCA has today published a non-handbook guidance consultation into the fair treatment of mortgage customer in payment shortfall
. The issues contained in this consultation are complex and relate to technical systems issues, any impact on borrowers in arrears has been inadvertent. The fact that this issue hasn’t been identified by the FCA during a number of recent reviews of lenders arrears handling processes proves that this is not a simple matter.
Lenders have always believed that their collections processes are transparent and treat their customers fairly; ensuring that the customer is in a position to repay their mortgage by the end of their chosen term.
As the FCA has now concluded that these existing processes don’t meet its expectations, lenders will need to digest the content of the consultation. Lenders will review their processes and identify any customer who may be impacted, they will then proactively contact affected borrowers to explain any impact it may have. There is no action for customers to take, they can be reassured that if they are affected that they will be contacted by their lender.
The BSA will liaise with its members and provide a full response to the FCA by the January deadline.