The Citizens Advice service helps people resolve their legal, money and other problems by providing free, independent and confidential advice, and by influencing policymakers.

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Citizens Advice response to FSAs research on mortgage arrears and lending

05-08-2008

Sue Edwards Head of Consumer Policy at Citizens Advice said:

"We welcome the findings of the FSA’s research on lenders’ mortgage arrears and lending practices, which mirror CAB clients’ experience.  Our 2007 evidence report showed that in some cases lenders have taken borrowers to court without exploring all the other options available to address the arrears resulting in excessive costs, stress and worry for borrowers. This could be avoided if lenders had acted in accordance with the FSA rules that govern arrears management practices.  Bureaux also see cases where it appears that the lender had taken little or no account of the borrower’s ability to repay the mortgage.  The borrowers got into mortgage arrears and faced repossession.

"In the financial year 2006/07 Citizens Advice Bureaux in England and Wales dealt with over 57,000 problems about mortgage and secured loan arrears, an 11% increase on the previous year and these problems rose by 35% in the first two months of 2008 compared with the same period in 2007.

"We call on the FSA to take urgent action on the findings of their research if the worst consequences of the deepening mortgage crisis are to be avoided. We believe this should involve strengthening the rules on mortgage arrears and lending practices.  

"We also call on the government to introduce a mortgage pre-action protocol as soon as possible to ensure that lenders only take possession action as a last resort. In the meantime it is vital that lenders treat their customers fairly and sympathetically and consider alternative options to ensure that repossession really does become a last resort."

Notes to editors on Citizens Advice

1. The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales; www.citizensadvice.org.uk
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. Most Citizens Advice service staff are trained volunteers, working at over 3,300 locations across England and Wales.
4. Advice and information  www.adviceguide.org.uk
5. Volunteer hotline 08451 264264 (local rate)
6. Citizens Advice Guide to your rights, second edition: January 2008 - over 600 pages of practical, independent CAB advice. An invaluable resource for any bookshelf - available from all good bookshops; price £11.99; ISBN: 9780141034089

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