IMLA hits back at FSA for suggesting all lenders fail on TCF
Peter Williams, executive director of IMLA, responds to today's announcement from the FSA that firms must ensure they treat customers who are behind with mortgage payments fairly in current market conditions."IMLA strongly contests the suggestion made by the FSA that all specialist lenders systemically operate a ‘one size fits all' approach to arrears management. MCOB 13 sets out a rigorous set of requirements regarding arrears and possessions. At the heart of it is the onus on the lender to work hard to reach a reasonable agreement with the customer in difficulty. All IMLA members adhere to MCOB 13 rules and regulations as set out by the FSA meaning they treat borrowers in difficulty as sympathetically as possible. Particularly in troubled times when arrears are mounting, it is in the interests of all parties to find an effective solution to overcome homeowners' problems.
The principles of TCF ensure borrowers in distress are treated as individuals and that even in the worst case scenario of possession, the borrower is given the best advice and assistance. While lenders clearly have to make commercially viable decisions when managing arrears, keeping people in their homes is preferable in a market such as this. By repossessing assets and selling them at a discount to their book value because of falling house prices, lenders could crystallise their losses. In some situations, however, delaying an inevitable sale of the property means the debt will continue to rise with no realistic chance of the borrower ever clearing it.
In short, specialist lenders are committed to taking account of the interests of both customer and lender through open dialogue between the two parties, who both stand to benefit from finding alternative means of managing arrears and avoiding possession if at all possible. Indeed a number of specialist lenders are actively developing their arrears management processes to put even more emphasis upon working with individual borrowers."