In its report on mortgage arrears and access to mortgage finance, the TSC also accuses the FSA of being “scared of the firms it is charged with regulating”.
The TSC says it has serious concerns that some lenders are charging “high and excessive mortgage arrears fees” to customers who fall into mortgage difficulties. It is calling on the FSA to require lenders to provide an itemised breakdown of the additional costs their charges cover.
The report says: “The seemingly leisurely approach of the FSA in terms of completing its review and enforcing possible breaches in arrears rules is a matter of grave concern.”
The FSA has refused to name the four lenders subject to enf-orcement action over arrears, insisting that publication would damage relationships with firms.
The TSC says: “The impression given at the moment is that it is the FSA that is scared of the firms it is charged with regulating.”
The regulator says: “The FSA continues to take a robust position with firms as soon as we have evidence of wrongdoing and also to ensure borrowers are treated fairly throughout the lifetime of their mortgage.”
The Council of Mortgage Lenders says lenders incur differing costs when managing arrears but the FSA should take action in the “small minority of cases” where there is poor practice. It says lenders are showing “significant forbearance” to borrowers facing difficulties.