The Intermediary Mortgage Lenders Association (IMLA) has criticised the FSA for its downbeat approach to the UK mortgage market.
The association also claims while its members take TCF principles seriously, they must also ensure confidence in the quality of mortgage assets to keep financial markets healthy.
Responding to Clive Briault’s speech to the Council of Mortgage Lenders, in which he launched a thematic review into lenders’ handling of arrears and repossessions, IMLA said the comments were not helpful in restoring confidence in the UK mortgage market.
Peter Williams, executive director of IMLA, says: “At IMLA we are surprised the FSA is adopting such a downbeat approach, and that they are omitting to highlight the many positives in the market or to take steps to restore confidence which has been dented by the sub-prime crisis in the USA.”
Briault claimed many lenders were consistently failing to take a customer’s individual circumstances into account, failing to make adequate contact with the borrower to discuss their difficulties and rushing to make possession orders.
Williams responds: “The FSA’s concerns about how lenders handle arrears are based on interviews with a very small sample of consumers in arrears, and seem to overlook lenders’ legitimate interests and their continuing desire to work with customers to find a solution.
“Lenders fully embrace the letter and spirit of the principle of Treating Customers Fairly, but we must also not forget that confidence in the credit quality of mortgage assets is of paramount important to the future health of the finance markets.”
He says lenders have a vested interest to ensure they work with borrowers to find solutions and minimise repossessions and arrears, with repossessions often resulting in a loss for the lender.
Williams also criticised the regulator and the Bank of England for failing to help liquidity return to wholesale mortgage markets.
“We would like to see the FSA, the Bank of England and the Treasury taking a more positive lead to help restore confidence among investors, lenders and consumers. An interest rate cut would be a very good start,” he adds.
The Bank of England is due to announce its latest interest rate decision later today.
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