The FCA has ordered mortgage lender Kensington Mortgages to change a number of policy terms affecting 7,000 Money Partners customers over concerns they were unfair.
In a notice of undertaking published last week, the FCA says terms in Kensington’s 2004 Money Partners mortgage conditions booklet provided the lender with too much discretion.
The terms allowed Kensington to demand full repayment of the outstanding mortgage immediately if there was failure to pay a single monthly payment, or if there was a change in customers’ circumstances.
Money Partners was established in November 2004 as a joint venture with Kensington, and was sold by Kensington to Goldman Sachs in January 2008.
Mortgages completed by Money Partners were assigned to Kensington.
Kensington stopped applying the 2004 conditions to any new customers from 2007, and has agreed to apply its new terms to all existing customers.
Money Partners suspended new lending in February 2009.
The new terms state that Kensington may demand repayment of the debt if the customer has failed to make two monthly payments or more.
The FCA also says two of the terms were not in plain language, including an explanation of what would happen if one of a pair of joint borrowers died.
A spokesman for Kensington says: “We have agreed with the FCA to change a number of terms in the booklet to make them fairer and clearer for customers.
“The terms that have been changed were never imposed by Kensington.”
London & Country sales director Michael Aldridge says: “Lenders must be sympathetic to changes in borrowers’ circumstances, particularly when relating to factors outside of their control.”