Tweet
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.
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.
good news, hope the investigation comes to fruition.
Comment