The FCA has published Thematic Review 14/3: Mortgage lenders’ arrears management and forbearance (TR14/3). In TR14/3, the FCA reports on its key findings of a thematic review into mortgage lenders’ arrears management and forbearance.


Whilst the FCA recognises that arrears management in firms has largely improved since its last review, it mentions that mortgage lenders and administrators still need to place greater emphasis on delivering constantly fair outcomes for customers based on their individual circumstances.

Consistently good outcomes

The FCA believes that mortgage lenders and administrators could do more to produce consistently good outcomes for their customers. In particular it found that:

  • cultures that focus on treating customers fairly and delivering good customer outcomes were not always fully embedded at firms;
  • firms did not always adopt proactive and forward looking strategies to identify and effectively engage borrowers in financial difficulty;
  • firms’ governance arrangements were not always sufficiently focused on customer outcomes; and
  • collections agents often followed overly process-driven ‘one size fits all’ frameworks which failed to allow for sufficiently flexible, judgement-led solutions that consider borrowers’ individual needs and circumstances, including specific customer vulnerabilities.

Interest rate rises

The FCA also mentions in TR14/3 that it is concerned about the risks to borrowers from potential interest rate rises. It wants firms to take proactive steps to identify borrowers who could be susceptible to potential interest rate rises and have strategies to treat these customers fairly.

The FCA proposes that despite the challenge ahead, further investment should be made to firms’ systems and people so that staff are better supported in the service that they are able to deliver to customers and that individual customer circumstances are given the due consideration necessary when processing mortgage applications.

View TR14/3: Mortgage lenders’ arrears management and forbearance – February 2014, 25 February 2014

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