AMI backs FSA's call to lenders

5 August 2008

The FSA has today issued a call for specialist lenders to keep Treating Customers Fairly guidelines in mind when dealing with mortgage arrears and considering repossessions.

Andrew Strange, policy director at AMI, says: “We are supportive of the FSA’s call to all lenders to ensure that consumers facing arrears are treated fairly. We agree that repossession should be used only as a last resort.

"We request that lenders consider all options such as waiving fees, changing those in difficulty to interest-only or payment holidays or reduced payments over a fixed term."

Strange reminds brokers that the FSA maintains that arrears remain low but are increasing.

AMI does not believe that the increase in arrears will exceeded previously published industry forecasts.

Strange adds: “We urge lenders to work closely with brokers when a client is facing difficulty, ensuring that clients are able to access the correct advice for their individual circumstances.

“We will continue to work with the FSA and lenders to ensure the best possible outcomes for consumers and we will build on the FSA’s good practice notes for our members."

AMI is also calling on the government to consider enhancing the Income Support for Mortgage Interest system, the state benefit system to assist homeowners in arrears.

It says the system currently provides less support and value than it did during previous housing market downturns of the early 1990’s, with longer waiting periods and a more realistic maximum loan amount.

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