The fees and charges impacted are:-
Charges for non-payment of the monthly mortgage payment by direct debit when the account was in arrears and no monthly mortgage payment was being made.
A portion of the solicitor’s instruction fee (£39) that exceeded the actual cost.
Early Repayment Charges applied to, arrears fees and charges.
A flat rate of interest of 8% will be added to the amounts due to customers.
No other fees or charges that may have been applied to your account are affected by this and no further refunds are due.
Upon reading the fsa publication i believe i have been affected by
failed to ensure that mortgage servicing staff had an adequate understanding of and implemented the requirement to treat customers fairly in handling its mortgage arrears and repossessions
focussed on the collection of payment of arrears over a short period of time within fixed mandates, rather than always establishing a suitable arrangement based on the customer’s individual circumstances
sometimes issued proceedings for repossession before all alternatives to repossession had been considered and accordingly, did not always use litigation only as a last resort
Field counsellors were engaged by GMAC to visit customers to discuss their mortgage arrears and to consider available options. GMAC regularly reviewed mortgage account servicing, but outcomes in arrears and repossessions focussed on quantitative measurements, such as the average number of days to get to court order, and did not provide any qualitative assessments of performance or TCF.
However, the guidance concentrated on information provision and establishing the reason for arrears in dealings with customers rather than a consideration of all appropriate arrears rehabilitation tools.
Options available to GMAC included alterations to the payment date, repayment type, extension to the term of the mortgage, capitalisation of arrears or a switch to a different mortgage product. These were considered if requested by the customer, but would not be routinely offered as an option by GMAC. A review of training programmes for mortgage servicing staff indicated that, prior to changes introduced in November 2008, arrears resolution centred on collecting payments via an ATP, with insufficient assessment of the viability of the ATP or whether there were other options to resolve the arrears situation that would produce a better outcome for the customer.
Applications for immediate repossession orders were frequently made by GMAC without evidence that all other viable options had been considered and that repossession was being used only as a last resort.
calculation and imposition of the Early Repayment Charge on mortgage balances which included arrears fees and charges within that balance; and
The above charges were unfair because they did not accurately reflect the additional administration work to the mortgage account caused by the fact that the customer was in arrears.
This led to a risk that the firm’s systems and controls were insufficient in relation to the handling and oversight of mortgage arrears to ensure the fair treatment of customers, and accordingly, the firm was in breach of Principle 3.
Principle 6 requires that a firm must pay due regard to the interests of its customers and treat them fairly. In doing so, firms should ensure that customers are treated fairly if they are in arrears with their mortgage by being flexible in considering a customer’s individual circumstances to ensure that the firm uses court action for repossession of a customer’s home only as a last resort
In focussing mainly on the collection of payment of arrears rather than always considering what may be a more suitable arrangement based on the customer’s circumstances and in issuing proceedings for repossession before all alternatives to repossession had been considered, the firm failed to pay due regard to the interests of some of its customers
In addition, GMAC did not treat its customers fairly as a result of applying certain charges and fees to customers’ accounts that were unfair as they did not accurately reflect the additional cost of administering an account in arrears in breach of MCOB 12.4.1R and 13.3.1
This resulted in some customers incurring excessive and unfair charges (i.e. charges that were not a reasonable estimate of the costs of the additional administration required as a result of the customer being in arrears) and accruing additional costs that could have been avoided had GMAC adopted a more flexible and fairer approach to arrears management tailored to the customer’s individual circumstances.
In determining the appropriate sanction, the FSA has had regard to the seriousness of the contraventions, including the nature of the requirements breached, the number and duration of the breaches, and the number of customers who suffered financial loss
the failings persisted over a significant period of time and impacted a large number of customers some of whom already had an adverse credit status;
(2) a portion of GMAC’s lending was to the sub-prime sector and arrears rates in this sector are higher than those in the rest of the mortgage market; and
I sold my home for £19k less than it was worth after i received a repossesion hearing . I Repaid 1 month before the erc was to be waived £3600 .
I would like help to fight for my money back any help advice would be so much appreciatedhttp://www.fsa.gov.uk/pubs/final/gmac_rfc.pdf
I am one of the customers
The FSA said a number of serious failings by GMAC-RFC were identified in relation to its dealings with customers experiencing arrears and repossessions. The investigation covered the period between October 31 2004 and November 30 2008.
The failings included excessive and unfair charges for customers that did not reflect administration costs; proposing repayment plans that did not always consider a customer’s individual circumstances; and starting repossession proceedings before fully considering all the alternatives.
I understand that i will be receiving
Our regulator the Financial Services Authority (FSA) have identified that certain mortgage arrears fees and charges paid by current and previous mortgage account holders should be refunded because the fee or charge exceeded the actual cost to us.
Certain mortgage arrears fees and charges will be refunded in full and others in part. Refunds will also include 8% interest.