THE Financial Services Authority (FSA) yesterday outlined new rules to help protect mortgage borrowers who get into arrears with their home loan payments.
The City watchdog is proposing to stop lenders charging heavy fees for customers who miss payments as well as making action to repossess homes only a last resort. Last year the FSA uncovered problems with the way some lenders and third party administrators were handling mortgage defaulters. Some charge £150 to people for a visit by debt counsellors or £300 for instructing a solicitor.
Under the new proposals, firms will be blocked from applying monthly arrears charges to customers once they have agreed to a new repayment plan. They will also not be allowed to add interest to the charges.