FSA orders mortgage refunds
January 25, 2010
Investigations by the Financial Services Authority (FSA) into the amount of money mortgage firms are charging their customers who fall into arrears on their payments could mean that thousands of homeowners throughout the country are in for large refunds. The FSA says that it will be looking closely at how lenders charge their customers and has already fined the company Gmac-RFC for imposing an additional charge of £45.00 per month on its customers who fell into arrears. The FSA says that even when extra administration is taken into account the charge is still excessive. The firm has been fined and ordered to refund money to its borrowers. Many more mortgage firms impose similar fines on their customers and after investigation by the FSA could see themselves having to make large refund payments.
Spokesman for insolvency specialists IVA.com, Terry Balfour say that he was pleased to see the watchdog taking positive action against lenders who are unwilling to show leniency to customers who find themselves unable to repay their mortgages on time. He said it was counterproductive to start levying fines on people who were already struggling. He went on to say that perhaps a modest fee for extra administration could be justified but that the present charges were unjustifiable.
Spokeswoman for the FSA, Cerris Tavinor said that the investigations into other lenders are ongoing. Results are expected by the end of this week as five more mortgage companies face potentially heavy fines.
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