Criticism over mortgage arrears charges
March 11, 2009
Industry officials from the debt advisory sector have recently expressed their concern over charges that are imposed by lenders when homeowners fall into arrears with their mortgage loans. Reports show that when homeowners fall into arrears with their mortgages many are charged between £20 and £50.
According to lenders these charges reflect the administrative charges that they incur when a mortgage account falls into arrears, and the charges are stopped once the borrower comes to some sort of arrangement with regards to repayment of the arrears.
However, debt advisory professionals are concerned that lenders are inflating these charges compared to their actual administrative charges, and that the adding of these fees is pushing many homeowners ever closer to getting repossessed, as they are bumping up the amount that is owed and making it even more difficult for the homeowner to get their arrears cleared.
One homeowner said that she was charged £30 a month when she fell into arrears, and she stated: “With every £30 which gets added on, the cost becomes greater and it becomes more difficult to catch up.”
One debt advice professional said that homeowners were being pushed closer to repossession because of these charges, and given the current financial climate lenders needed to stop levying these fees on borrowers’ accounts.
He said: “We think the charges should be waived in the current crisis because they will undermine efforts to keep as many people in their homes as possible.” Another debt advisor said that he had known the charges to continue even when the borrower had come to an agreement with the lender with regards to repaying arrears, and he said: “We think it’s very unfair that people in financial difficulty are being charged just for being in arrears. It’s particularly unfair when people have reached an agreement with their lender.”
- Deadline set over fairness to mortgage customers Over recent months the government has been trying to bring in new guidelines and rules in relation to mortgage lending, to ensure that mortgage customers are treated fairly by banks and lenders in the current
- FSA too lax over repossessions The UK's financial regulator, the Financial Services Authority, has been accused of being too lax over the rising level of repossessions in the UK, according to a recent report. A group of MPs has accused
- Repossession levels may not be as high as predicted The Council of Mortgage Lenders has stated recently that the level of repossessions likely to go ahead over the course of this year may not be as bad as originally estimated, and as such the
- Thirty percent rise in mortgage arrears A recent report has shown that although the base interest rate has fallen to its lowest level in history, at just 0.5 percent, the level of mortgage arrears in the UK has soared by 30
- Extra Costs Causing Hardship for Tenants Tenants renting flats and houses in England have recently been faced with a rash of charges that is cutting into the money they have allotted for their expenses. One charity in England has labelled these
Comments
Got something to say?