FSA steps up mortgage regulation

The Financial Services Authority (FSA) has outlined new regulations that aim to cut mortgage fraud.

It is looking to strengthen existing rules with the changes, which include ensuring companies record all telephone calls relating to arrears and keep these for three years.

In addition, the FSA is preventing businesses from applying monthly arrears charges in cases where a repayment agreement has been reached, as well as compelling them to only use property reposession as a last resort.

Director responsible for mortgages at the FSA Lesley Titcomb said the plans help to ’underline the standards that firms must meet’, adding: ’Lenders need to be in no doubt of their obligations to customers who fall behind with payments.’

Under the changes, mortgage advisers and individuals who arrange sales will all become individually accountable to the FSA, meaning the will have to pass a ’fit and proper’ test.

Last week, chairman of the body Lord Turner called for cooperation between accounting standard setters and those responsible for regulating the banking sector to be improved. ADNFCR-2318-ID-19578104-ADNFCR