So you have fallen into arrears with your mortgage payments. Bear in mind that this is not a hanging offence. It is not even a criminal offence. In fact there are certain standards that you can expect your mortgage provider to adhere to as you try to cope with the inevitable stress of the situation.
These standards are set out in a booklet entitled: ‘Mortgages and Home Finance: Conduct of Business Sourcebook (MCOB)’. This booklet is published by the Financial Conduct Authority or FCA which was previously known as the Financial Services Authority or FSA. If your lender is regulated by the FCA and most providers of home mortgages in the UK are, then they must comply with FCA rules regarding their treatment of their customers and in particular they must ‘deal fairly with any customer who is in arrears’.
You should be aware of these rules when you set out to deal with your mortgage arrears, howsoever they have arisen and in particular when you seek to try and come to an arrangement with your lender. Hereunder is a summary of the rules your lender should adhere to. They must:
- Have a written policy on how to deal with customers who are in arrears
- Set up a payment plan which is practical and is based on your circumstances and which covers the rest of the term of your mortgage, where appropriate
- Consider all options to help you deal with your arrears and give you a reasonable period of time to consider options that they may suggest to you
- Make you aware of any schemes run by the Government that may help you
- Send you regular information about your arrears
- Not apply charges to your account each month where you already have an arrangement in place to repay your arrears
- Use payments you make to clear your arrears before clearing the charges that have been added to your account and
- Not put pressure on you through too many calls or letters