The regulator plans to investigate variations to interest rates, changes to lending criteria or the withdrawal of products or features to consider whether a rule or guidance change is needed.
The DP14/2: Fairness of changes to mortgage contracts discussion paper will not cover unregulated contracts like buy to let, but will cover any residential contract signed after 31 October 2004.
This comes despite the fact the biggest contract change uproar in recent times came from landlords after West Bromwich Building Society raised its SVR 2% in December last year, affecting 6,700 residential and investor borrowers.
The Bank of Ireland also hiked its tracker rate in May 2013, affecting 13,500 residential and buy-to-let customers.
The Financial Ombudsman confirmed it had received 200 complaints about rate rises on trackers to July 2013.
Timely communication and the borrower’s ability to escape the mortgage contract change will be key factors in any assessment of breaches, said the regulator.
Clive Adamson, director of supervision at the FCA, said: “Consumers have a right to be treated fairly if their lender changes a term of their mortgage contract. It isn’t always clear though to consumers how lenders and the FCA assess fairness in this area. This paper gives an opportunity for firms and consumers to give their views on what fairness means when changes are made in the terms of this very important financial product.”
The regulator intends to have face-to-face meetings with consumer groups, firms and trade bodies before the consultation ends on 30 September 2014.
The full discussion paper can be found HERE.
