FCA chief executive Martin Wheatley says he is “disappointed” at the way lenders have responded to the mortgage market review, saying lenders have not approached the regulatory changes in the right spirit.
The Daily Mail reports that while Wheatley agrees it is reasonable for lenders to decide what level of risk they are prepared to take, some lenders have gone too far.
Wheatley says: “It shows some lenders are not approaching the rules in the spirit they were intended.
“Every firm has a responsibility to treat their customers fairly and we would expect them to put good customer outcomes at the heart of everything they do. Leaving customers on higher rate deals does not fit with either of those criteria.”
Since the new regulations were introduced on 26 April, lenders have been criticised for not using transitional rules that waive the new affordability checks for existing borrowers who wish to switch to a lower rate mortgage. As a result, thousands of borrowers have been stuck on lenders’ standard variable rates, which are often much higher than the original rate when the mortgage was taken out.
Customers and brokers have also complained about the increase in waiting times to speak with lenders as well as poor application processing times and service.