The FSA says it is confident that the four networks it forced into halting AR recruitment while they get their systems in order will quickly recover and continue to operate in the market.
Michael Lord, head of the FSA department responsible for supervising small mortgage firms, says that each of the four will have to invest money, time and effort to get their houses in order.
But he says: We are hopeful that these four firms will put things right – thats why we were able to go down the voluntary route because they are willing to work with us to improve their standards.
Generally, firms are willing to work with us to put things right when we give them the help and advice that they need to improve.
However, when asked how the FSA expects the firms to raise the capital required to get their houses in order, Lord says it will not contribute financially but will provide the specific help they need to put things right.
Lord also believes that by making the investment, the four will make their business models more viable in the long term, and less open to complaints and claims that could put them at risk financially.
There have been persistent calls from the industry for the FSA name and shame the four.
By not naming and shaming critics claim that the FSA is inadvertently penalising those networks that have already financially invested in their systems.
But Lord says that under statutory law the FSA can only name and shame when the case concerns enforcement a factor the FSA has yet to rule out should the network 4 not achieve the goals set.
He adds: Ultimately if they dont put themselves right and the risks are still there then we could take enforcement action.
Thats at the end of the process, and we are still working with these firms – theyve been very positive about the recommendations we given them to put things right and theyre actually doing that now.
If they dont do it right or do it at all then wed have to take further steps.