Banks need to recognise the shortcomings of these measures and should work much harder to widen their range of options for dealing with affordability to bear on this problem, in particular in individual cases where there is little prospect of servicing the original loan terms. At the same time, however, the banks must husband their available capital in a prudent manner.
As explained previously, under the Code lenders are required to publish details of their approaches and the criteria that must be met to be considered for the different options. As part of our review we will be gathering information on the various options each lender offers.