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Sub-prime lender sets aside £9m for possible FSA fine

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  • Sub-prime lender sets aside £9m for possible FSA fine

    Sub-prime lender sets aside £9m for possible FSA fine

    December 21 2010 12:01AM

    A lender specialising in sub-prime mortgages and secured loans is being investigated over its treatment of customers in financial difficulty and has set aside £9.4 million for potential fines and refunds.

    The Financial Services Authority is looking into how Swift Advances dealt with borrowers who missed mortgage payments or were facing repossession. It is also investigating Swift’s lending practices. The company has set aside the money to cover legal and professional bills, a potential fine and the cost of compensating customers.

    Swift offered mortgages to borrowers with a poor credit history through its subsidiary Swift 1st until 2008. The company, which is majority-owned by the private equity group Alchemy, still offers a small amount of “second charge” secured lending to borrowers already having a mortgage.

    Swift admitted in its accounts that some customers who repaid their mortgages early had suffered because of an “anomaly” in its systems, which meant that the amount they owed was miscalculated. Swift said that its secured lending practices were also under investigation by the Office of Fair Trading.

    The FSA has ordered four mortgage companies to pay up to £15 million in fines and refunds for the unfair treatment of customers with payment difficulties. Failings included charging excessive fees to borrowers for missed payments and seeking to repossess properties too quickly. The FSA said that a further five lenders were facing action. HML, an outsourcing company used by three of the fined companies to chase borrowers who had missed payments, has not been fined by the FSA. One of its clients GMAC-RFC paid £10.5 million in fines and redress. The other companies fined by the FSA were Kensington Mortgage Company, Redstone Mortgages and Bridging Loans.

    In June the FSA introduced new rules banning lenders from applying an arrears charge if a borrower in financial difficulty has already agreed a repayment plan. It also said lenders should use payments from borrowers to clear their arrears before forcing them to pay charges.
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  • #2
    Re: Sub-prime lender sets aside £9m for possible FSA fine

    SWIFT good news, hope the investigation comes to fruition.

    I'm a little overwhelmed with all the work the FSA and OFT are doing at the moment !
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

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    • #3
      Re: Sub-prime lender sets aside £9m for possible FSA fine

      Could this mean that if people (such as me) had sold their house partly due to the pressure being piled on by Kensington Mortgages we may now have some recourse?

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      • #4
        Re: Sub-prime lender sets aside £9m for possible FSA fine

        Possibly - have you read the Kensington docs from the FSA ?

        Kensington Mortgage Company Limited fined £1.225 million for unfair treatment of some customers in arrears and will pay estimated £1.066 million customer redress leads to the formal docs.
        #staysafestayhome

        Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

        Received a Court Claim? Read >>>>> First Steps

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        • #5
          Re: Sub-prime lender sets aside £9m for possible FSA fine

          Mods, feel free to move this if you feel it sits better on a thread by itself or whatever.

          Kensington Phone Number 0845 1992222 - have mortgage account number to hand if possible, otherwise just do not respond when asked for it (3 or 4 times) and they put you through to an advisor.

          SAR's should be sent to:

          Gateway House
          Gargrave Road
          Skipton
          North Yorkshire
          BD23 2HL

          Likely only to get anywhere if mortgage dealt with pre2008 as since then they have cleaned up their act a lot, but does not mean it's not worth trying.
          I note they have set aside in excess of £1 million for repayments to customers!
          Last edited by Caspar; 21st December 2010, 12:43:PM. Reason: Lost all ability to spell!

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