There is much controversy swirling after the FSA announced that they are continuing to research lending practices on easy loans. Since so many easy loans were offered over the past few years and many went into default, there are questions on whether lenders knew that the easy loans could never be paid back.
Lesley Titcomb, director of the FSA, responsible for mortgage lending, said: “As our data shows in these current market conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be a last resort.”
Citizens Advice head of consumer policy, Sue Edwards, said: “We welcome the findings of the FSA’s research on lenders’ mortgage arrears and lending practices, which mirror CAB clients’ experience. Our 2007 evidence report showed that in some cases lenders have taken borrowers to court without exploring all other options available to address the arrears, resulting in excessive costs, stress and worry for borrowers. This could be avoided if lenders had acted in accordance with the FSA rules that govern arrears management practices.”
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