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Lenders and advisers have expressed surprise at the FSA’s suggestion that specialist lenders operate a one-size-fits-all approach to mortgage arrears.

Peter Williams, executive director for the Intermediary Mortgage Lenders Association, said Mortgage Conduct of Business rules put out a rigorous set of requirements regarding arrears management.

He said: “All Imla members adhere to Mcob’s 13 rules and regulations as set out by the FSA, meaning they treat borrowers in difficulty as sympathetically as possible. Particularly in troubled times when arrears are mounting, it is in the interests of all parties to find an effective solution to overcome homeowners’ problems.”

Meanwhile, the Council of Mortgage Lenders welcomed the FSA’s confirmation that mainstream lenders are largely complying with its arrears and repossessions requirements yet said it was “surprised” by its observations on specialist lenders.

A spokesman for the CML said: “Specialist lenders have been working extremely hard to manage arrears. We urge the FSA to work constructively with those lenders to ensure there is shared understanding and agreement about the requirements.”

The statement comes as the FSA reiterates its call for mortgage lenders to ensure they are treating customers fairly in the current market conditions as its latest review finds weaknesses in the way some lenders are handling arrears and repossessions - particularly for consumers with impaired credit histories.

New data on mortgage lending from the FSA shows that the number of consumers facing arrears and repossessions, while historically low, is increasing.

It also shows lending to customers with an impaired credit history accounted for 2 per cent of overall new lending during the first three months of 2008.

In dealing with customers in arrears, the FSA is calling on firms to be flexible, to make sure they consider customers’ individual circumstances and to use court action as a last resort.

Lesley Titcomb, director for the mortgage sector of the FSA, said: “In these conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution.”

Andrew Strange, policy director for Ami, said: “We request lenders should consider all options, such as waiving fees when temporarily changing those in difficulty to interest-only or where a customer has fallen into difficulty considering a payment holiday or reduced payments for a fixed term.”