Rogue Gallery

Below are some of the more high profile cases from the past year or so where mortgage lenders have had to be reigned-in by the Financial Services Authority.

Did you know that the county court rules state that a mortgage lender must only use repossession of your home as a last resort? (Para 7.2 Mortgage Pre-Action Protocol) Did you know that they very often ignore this court rule?

Don’t take my word for it. Look what the Financial Services Authority says about it:

“The findings from our thematic reviews demonstrated that firms were often too quick to take repossession action, focusing too strongly on recovering arrears without reference to the borrower’s individual circumstances. In addition, some firms explored very few forbearance options before taking legal action against borrowers. We observed these poor practices across the mortgage market.”
(Para 4.6 Mortgage Market Review 2010)

Let's hear it for GMAC

Post Pic
In October 2009 the FSA fined GMAC £2.8 million (it was going to be £4 million but because they owned up the FSA lowered the fine) and ordered them to pay redress to well over 46,000 of their customers of £7.7 million for:

- Excessive and unfair charges.
- Taking legal action without exploring alternatives.
- Proposing payment plans that didn’t always consider a customer’s financial circumstances.
- Inadequate training of staff on mortgage repossessions and arrears recovery.

Put your hands together for Redstone Mortgages

Post PicIn July 2010 The Financial Services Authority fined Redstone Mortgages £630,000 for what they called “Poor treatment of some customers facing mortgage arrears”, which included:

- Failing to treat customers fairly.
- Focusing on reducing arrears regardless of customers personal circumstances.
- Having written policies that promoted unnecessary legal action.
- Sending excessive and confusing correspondence.
- Applying unfair and excessive charges.

Ladies and gentlemen I give you Bridging Loans Ltd

Post PicIn November 2010 the FSA fined mortgage company “Bridging Loans Ltd” £42,000 and personally fined its director Joseph Cummings £70,000 for what it termed “Serious failures related to lending practices and for failing to treat customers fairly in arrears”.

Also its interesting to note that the FSA also banned three of the other company directors (all in the same family) from acting in senior positions within the financial sector. This was the first case where the FSA took action against the directors themselves – maybe if they did this more often other mortgage lenders might ensure that their companies treat their customers fairly.

Recommended Articles

How To Save Your Home

Bank Negotiation Kit

Bank Negotiation Kit - you'll learn how to:

- Negotiate with your lender effortlessly
- Get agreement on an amount you can afford
- Save your home
- Stop repossession proceedings
Learn More