Homeowners Could Receive Refund Of Loan Arrears Fees
Over the course of recent years, there have been many thousands of homeowners who have fallen into an arrears situation on their home owner loan or mortgage and as a result of this have been charged a monthly penalty fee by their lender.
Last year, the Financial Services Authority (FSA) imposed a fine of £2.8 million on GMAC-RFC and ordered the company to repay around £7.7 million back to borrowers in unfair loan arrears fees, due to serious failings in the lenders loan arrears handling policy and not treating customers fairly.
GMAC were charging a fee of £45 every month on loans which were in arrears and the FSA deemed this charge to be illegal, as it hampered borrower’s attempts to repay their loan arrears and get themselves back into credit. All of GMAC’s loans were managed by an outsourced service provider called Home Loan Management (HML), which is a subsidiary of the Skipton Group.
HML also mange the mortgage and home owner loan accounts for several other lenders including: Bradford and Bingley, the Nationwide, Kensington, Morgan Stanley, Mortgages PLC and Wave and all these lenders loan products will be subject to similar charges when it comes to loan arrears.
The FSA estimate that there are somewhere in the region of 400,000 individuals who have a home owner loan with one of the 30 lenders managed by HML and around 80,000 of these borrowers are likely to have loan arrears already and be paying these unfair and illegal charges along with their monthly loan repayments. The FSA have advised that anyone who has gone into arrears on their loan since 2004 could be eligible for a refund of all the fees which have been paid and if someone thinks they may qualify for this refund, they should contact their lender in the first instance. If the lender is unable to resolve their complaint, the borrower then has the right to go to the Financial Ombudsman Service (FOS).
