FSA warns lenders on 'unenforceable' tracker contracts


The FSA has told lenders to ensure they exercise the principles of TCF for customers on tracker mortgages.

Jon Pain, managing director of retail markets at the FSA, also repeated warnings about dealing with arrears and repossessions. Speaking at the Council of Mortgage Lenders' (CML) annual conference, Pain says lenders should not attempt to introduce contract terms that do not exist or are unenforceable for tracker rate customers. Many trackers have a interest rate floor, a point at which they will not go any lower regardless of the Bank of England's base rate. This prevents lenders from facing huge losses should the risks of deflation become so great the base rate is cut to 0%. Pain unde...

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