Mortgage Lenders Fined Over 'excessive' Charges

[Ruby]

There is a very interesting article in the Scottish Daily Express today. Don't know how to post, maybe someone else can help with this however the bones of the article are as follows:

Hundreds of thousands of home owners could be in line to collect hefty refunds from unfair mortage charges.

Lenders face being forecedto hand back millions of pounds in fees imposed on customers who missed their monthly loan payments.

One firm has been fined £2.8 million and made to return £7.7 million to borrowers when it was found to have acted unfairly. The crackdown by watchdog the Financial Services Authority is likely to lead to claims by hundreds of thousands of home owners who believe they have been harshly penalised.....

The FSA fined Gmac-RFC, a specialist lender, after finding it guilty of treating customers in arrears unfairly between October 2004 and November 2008. the fine was partly due to the £45 a month that the lender levied on borrowers who went into arrears. The FSA said this was 'excessive' and did not reflect administration costs.

However as many as 30 lenders - including Bradford and Bingley and specialist lenders like Morgan Stanley have a similar charging structure ......

[Ruby]

Re: Mortgage Lenders Fined Over 'excessive' Charges

I have just had a letter from Advantage Finance yet again charging me a £55 monthly arears charge. The straw has now broken the camel's back!! I have written to them to refund all the charges with compound interest at their rate or else I shall forward all relevant correspondence to the FSA and OFT for further investigation. I have given them two weeks to refund.

Has anyone else challenged their mortgage lender for a refund on the back of newspaper article. I would love to hear of your outcomes. I will keep you posted with mine too......

[TUTTSI]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Hi Ruby
The Kensington was also fined for overcharging, read here - http://www.legalbeagles.info/forums/...ad.php?t=22474 as well as Gmac.

Some people have made a full recovery of charges through the FOS but it takes time and not sure whether this will get you compounded interest. Having said that our Mortgage company do not charge interest on the charges, so are you 100% certain that yours do.

My advice is to write a 14 day letter to your mortgage lender requesting a full refund and advise then that if you do not receive a satisfactory response you will report this complaint to the FOS and the FSA to seek full reimbursement.

let us know how you get on.
Regards
Tuttsix

PS You can also point out in your letter that The Kensington and Gmac have been fined heavily by the regulator as having overcharged their mortgages for excessive mortgage charges and have been ordered to pay back the excessive charges . You could even quote the amount of fines that have been handed down, that should gee them along.

[Ruby]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Thanks for the advice. I had assumed that the monthly interest is charged on the total of the outstanding mortgage balance, which would include the charges part of it, as Advantage do not give two separate totals and the charges are just added to the total of the mortage balance, hope that makes sense.

[TUTTSI]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Hi Ruby

Unless it is not a conventional mortgage. Ours is with Rooftop and they are like the Kensington and we have been charged mega bucks for every letter and late payment etc etc....sometimes as much as £70 a throw.

I guess you should phone them and ask if the charges attract interest or not and if they do what rate are they charging if any.

Then you will know how to write your letter as whether it is with interest or not.

I believe the peeps who have had refunds through the FOS have received compensation as well. So you could throw the compensation into the equasion.

Good luck
Tuttsi x

Thanks for the advice. I had assumed that the monthly interest is charged on the total of the outstanding mortgage balance, which would include the charges part of it, as Advantage do not give two separate totals and the charges are just added to the total of the mortage balance, hope that makes sense.

[Ruby]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Letter is now on its way.....

Will keep you posted. You didn't mention whether you've had luck with getting yours refunded?

[TUTTSI]

Re: Mortgage Lenders Fined Over 'excessive' Charges

No not yet, we have taken a back burner as we were behind with our monthly repayments to Rooftop which we have agreed to pay back over several years and we did not want to start anything as they were threatening us with repossession.

Also, we found out that they were not charging interest, the charges are just being added to the mortgage total so unless they go for a full repossession we would slap in a claim for the charges to be refunded.

Hopefully, Rooftop have now settled down with their threats as they keep on changing the goal posts and we will resume our claim with them when we consider they cannot do us any harm as they have a suspended court order hanging over us and we are concerned that they could turn nasty and put it into action.

Tuttsix

Letter is now on its way.....

Will keep you posted. You didn't mention whether you've had luck with getting yours refunded?

[Nickij01]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Hmmm this is very interesting. We have a mortgage with West Bromwich, we borrowed £60000 May 2007 for a shared owernship property and we seem to have barely made a dent in it due to the following. Every month the payment is returned unpaid, this is because for some reason, West brom go to collect it before our salary hits our account. It is supposed to come out on the last day of the month so we enquired if we could move the payment day to the first day of the month, so in other words one day later than when it comes out now and they said that this would then put us into arrears therefore having to pay them another instant mortgage payment which we simply cannot afford. So every month we get a charged a total of £50, £35 charge from west brom for returned DD and then our bank for a returned DD of £15.

Where do we stand legally with this, is it worth proceeding claiming the charges back from the mortgage lender? If so is there somewhere on here which shows you which process you should follow?

Thanks in advance for your help.

NJ x

[Ruby]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Tuttsi, I can see where you are coming from. This has crossed my mind as well. We are in arrears but have not had the repossesson threat yet ......
Hopefully that will not happen. I did put it bluntly in my letter that they are 'profiteering out of peoples financial misery'.

Nicki - my suggestion to you would be write to the company, therefore it becomes a formal complaint and they have to respond properly to it. Give them a time limit to respond back, I always find the fourteen days limit works well and see what happens from there.I am quite certain there are lots of people in your situation and companies MUST have ways to work around different pay dates without getting charges imposed.

If you find they are unresponsive to your request in refunding your charges and resolving your dilema long term I would go to the Ombudsman Service. Good Luck

[TUTTSI]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Well this is our problem with Rooftop, our payment date has traditionally been the end of the month for the past 9 months or so, suddenly they want us to bring it forward to the 15th monthly, and threatened that if we did not do this they would bring it back to the 1st monthly, this we cannot do, so they threatened us with the repossession.

They wanted copies of bank statements, which we did not feel they were entitled to as our mortgage was self certifying and with a sub prime lender and they certainly did not want copies of bank statements when we took out the mortgage.

In the end we agreed with them that I would get a letter from my largest client who fortunately pays me on a regular basis at the end of the month and is sufficient to pay the mortgage and they said they would then agree to keep the payments at the end of the month. Then after I obtained a letter for them they regneged on the agreement.

We pointed out to them that they would have had telephone recordings and notes of our discussions and that they should refer to these. Since then they have not responded. We believe they will lay low for a month or two and then start up again with their threats.

Both my husband and I are self employed and he does not receive monies on any set day.

Tuttsi x

ps Ruby thats why I feel the FOS is a safer route than the courts.

[Ruby]

Re: Mortgage Lenders Fined Over 'excessive' Charges

We are living in difficult times. What would we all do without LB to keep us sane and to know we are not alone!!!!!!!

In the words of Arnie, 'I'll be back' and let you all know how I got on. Take care and keep your chins up.......

[Ruby]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Just got a letter from from Advantage offering me a refund of just over £200. I'll need to sit down and calculate how many charges they have imposed on my account 'cause I'm sure they are chancing their luck with the figure. The ball is rolling anyhow and in my favour!!

[TUTTSI]

Re: Mortgage Lenders Fined Over 'excessive' Charges

That is fantastic news :cheer2: a result at least they have made an offer.

Let us know if it is correct?

Tuttsi x

[borgbaiter]

Re: Mortgage Lenders Fined Over 'excessive' Charges

hi

just a word of warning. dont take them to court. by all means use the fos. they get very grumpy if you try and take court action.


BorgBaiter

[redman]

Re: Mortgage Lenders Fined Over 'excessive' Charges

Below is a censored version of a letter I sent to Mortgage Express on behalf of a client in trouble. My Client has just received a little over £1500 back from MX as a gesture of good will!


Mortgage Express certainly know how to kick a Man when he is down! Little wonder it's in the state it is now!!

Be advised that I am lodging a complaint with the financial services Ombudsman based on the following:

• Your fees are unreasonable. A £30 charge per account times by 28 = £840.00 for sending a couple of emails. This would give you a rate of aprox £5040.00 per hour based on 10 minutes of your time to send a standard precomposed email/letter.
• Your fees are unjustified. You have been made aware that rents from these properties do not clear until the last day of the month at the earliest and in most cases, the 5th of the month yet, you insist that they are paid in full as soon as we are able and still apply the charges.
• Your constant threats to instruct LPA Receivers are also unjust. You are aware that Mr X has given complete control of the properties and the finances over to xxx so that my team can best negotiate payments and arrears on his account whilst keeping the properties in a safe and habitable state of repair and insuring the same. I believe that this company is doing it's best to achieve that goal under considerble pressure and unreasonable charges as detailed above. The instruction of LPA'Rs will only increase the debt by £28,000 and greatly slow the income of rent towards the mortgage payments. It would also take a full team a minimum of 3 months to contact the tenants, local housing benefits offices etc.
• You are aware of the state of Mr x's finances and I have previously shown you his on-line bank statements! Mr X is not in a position to pay two months subscription along with arrears. The gross income from all properties is aprox £9k against outgoings of the same.
• It seems that Mortgage Express will not negotiate or be reasonable in these matters so that they can justify the instruction of LPA'Rs who will sell the properties at any price once they have had the fee's for the minimum instruction period and leave the Borrower in considerable debt just to clear down the banks lending book.

The above is a copy of the complaint I am lodging on behalf of Mr X as your email of earlier today indicates it is your final reply (as per the terms of the Ombudsman). Should the matter not be resolved, we will have no alternative but to instruct Solicitors and have the matter heard in Court.