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Mortgage lenders urged to provide clearer mortgage paperwork
Wed, 18 May 2005
Mortgage lenders should improve the quality of mortgage holders' documents that set out the mortgage details.

The Financial Services Authority (FSA) has written to chief executives of mortgage lenders to offer help in improving the standard of these documents.

It is asking all mortgage lenders to undertake a review of their documentation so as to provide consumers with clear and comparable information to help them understand the products they are being offered.

Key facts documents, which are intended to deliver clear and simple information to mortgage holders, are variable in quality and contain widespread inaccuracies, the FSA said.

"We acknowledge the effort firms have made to produce the new mortgage disclosure documents and in our review we have seen some good examples. However, we also found cases where documents were not in line with the format and content required by our rules or were too long and written in overly legalistic language," said the FSA's managing director of retail markets.

CML director general Michael Coogan welcomed the FSA's feedback. "In cases where key facts documents are not in line with the FSA's rules, improvements will be needed and we are pleased that the FSA plans to work constructively with the industry to achieve this objective," he said.

"We also welcome the FSA's intention to promote a 'less is more' strategy to disclosure. But in the industry's defence, it is hardly surprising that some lenders may have included more information than the rules require, in order to avoid future accusations of failing to inform customers about important information," he added.

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