The Financial Conduct Authority is launching a thematic review of lenders’ arrears handling procedures and forbearance management later this year.
In its business plan for 2013/14, published today, the FCA says the fair treatment of mortgage borrowers who have experienced financial difficulties will form a key area of focus in 2013.
The FCA says: “Following previous thematic reviews, which led to a number of successful enforcement cases, we expect firms to be able to clearly demonstrate how they comply with our rules in this area, ensuring fair and appropriate outcomes for borrowers in arrears.”
Figures from the ONS Housing Survey, published earlier this month, showed the number of owners who were forced to give up their properties due to financial pressures fell by 54 per cent between 2010 and 2012, compared with the period running from 2005 to 2009.
The FCA says it will also publish the results of an initial review into interest-only mortgages in the near future. The FSA has been investigating interest-only mortgages and the risk of existing customers being unable to repay the amount due at the end of their mortgage term.
The FCA says it will intervene where it has concerns over certain interest-only products.