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FSA considering enforcement action against several lenders

The FSA is considering referring several lending firms to enforcement and has asked others to undertake remedial work following its review of responsible lending.

The regulator conducted a review of 18 lenders and found that some, particularly those which offered mortgages to consumers with impaired credit, were not checking income where they should have had reason to doubt the amount declared.

The FSA also says self certification of income was being used without adequate justification being recorded by the lender.

In addition the regulator says that some lenders’ responsible lending policies were vague on the factors used to assess customers’ ability to repay. They also failed to include any factors to assess ability to repay in retirement where repayments were to be made from retirement income.

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