AMI disappointed with arrears findings

Richard Farr, director of AMI, said it was disappointing that the FSA had found areas of non-compliance by firms with arrears rules, particularly given more borrowers were expected to fall into arrears with rates on the rise.

He continued: “We are calling for all lenders to invest in their arrears management process, and consider involving the original intermediary. In times of financial crisis, we believe it is important for lenders and intermediaries to work together to help borrowers.”

Peter Williams, executive director at IMLA, welcomed publication of the review. He commented: “Almost all sub-prime mortgage sales are through intermediaries, who are clearly best placed to take account of the very specific circumstances that such borrowers face. Not surprisingly, customers rely on their broker’s professional advice and expertise.”

Williams said in terms of the Mortgage Conduct of Business rules (MCOB), the study threw into question the effectiveness of the regime in place and the degree to which it is over-engineered. He added: “Hopefully findings such as these will be fully reflected in the MCOB Review and its outcomes.”