We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Mortgage Arrears Charge

Hope this is posted in the correct area.
A while ago I got intp financial difficulties whis ultimatly led to me having mortgage arrears. the mortgage company took out a CCJ against me, I promised to pay back an extra £200 a month ontop of my normal mortage payment. I have kept this up and not missed a payment, however each month they charge me £54 "mortgage arrears charge" which meens I am only reducing my arrears by £146. is this charge fair. and can I do anything about it? I have now paid over £1300 in charges.
help would be appreciated.

Comments

  • Mrs_Bumble
    Mrs_Bumble Posts: 1,028 Forumite
    Who is the lender?

    Have you checked the terms of the court order, from what you say this isn't a CCJ, this is a possession order.

    Have you spoken to the lender and asked them why they are continuing to charge the monthly arrears charge, whilst the court ordered arrangement is in place.

    You can seek advice from the agencies in this leaflet

    http://www.moneymadeclear.fsa.gov.uk/pdfs/mortgage_cantpay.pdf
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Hi, Thanks for your reply, the court agreed not to reposses as long as I paid £200 towards my arrears, sorry I didn't make that clear. I will write to the mortgage provider(mortages plc) and see what they say.
  • Mrs_Bumble
    Mrs_Bumble Posts: 1,028 Forumite
    There are a few threads if you go through where this charge has continued to be applied even though a court ordered arrangement is in place, it tends not to be the mainstream lenders and the FSA are apparently looking into this practice.

    Write a formal letter of complaint and ask for their complaints procedure as once you have completed the formal procedure you can then refer to the Financial Ombudsman.

    Contact the agencies in the leaflet for advice on how to word the complaint oh and quote the FSA slogan "Treating Customers Fairly"
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • The FSA have published
    http://www.fsa.gov.uk/pages/About/What/thematic/mortgage_arrears/fees.shtml
    - guidance on arrears charges and , quote,
    Good practice

    • A policy is in place to minimise arrears charges, for example by not charging a monthly arrears management fee in cases where the borrower is maintaining an arrangement to repay arrears.
    - sounds like yours is breaking these guidelines...

    Anyone know of any success with persuading lenders to reduce their arrears charges to something reasonable??

    Cheers!

    Lodger
  • Mrs_Bumble
    Mrs_Bumble Posts: 1,028 Forumite
    Interesting link theartfullodger, thanks for posting that.

    It seems from going through the threads on the forum here that it is the non mainstream lenders that are pursuing this course of action and it makes me very cross!
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • happybroker
    happybroker Posts: 1,301 Forumite
    Main stream lenders do this also but less of their customers get into arrears for any long period of time so less of them post about it. It's a shocking practice I agree but then again they seem to be making more of a habit of this sort of thing despite pressure from the regulator to treat people fairly.
    Happily an ex mortgage broker!
  • Mrs_Bumble
    Mrs_Bumble Posts: 1,028 Forumite
    I worked in collections for a few years for a mainstream lender and the arrears charges would be added whilst no contact and no arrangement was in place. Once an arrangement or court order was in place then the arrears charges would cease until the arrangement or court order were not adhered too. I believe they followed guidelines that were in place along with other mainstream lenders. Lot of the cases were very long term cases, some years! Some people just won't pay and it is all part of the way they live, they will pay one outstanding bill for a while then switch to another etc.

    These non mainstream lenders though have taken on cases that are more high risk and the overall scheme of things seems to just make as much money as possible out of the whole process and I find it flabbergasting that the regulator with all its power and wisdom is not looking at the issues that plainly cause the most misery and sorting them out!
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • dfh
    dfh Posts: 1,073 Forumite
    To the OP-Mortgage arrears fees have recently come under scrutiny.I would be highly tempted to put in a written complaint saying that the charges are excessive.Good luck.Have a read through the article below which is from the BBC website.

    A committee of MPs has attacked the way some mortgage lenders levy high charges on customers who fall into arrears.
    The Treasury Committee said this practice was "intolerable" and demanded that the Financial Services Authority (FSA) put a stop to it.
    The committee also said some lenders were breaking the rules by using repossession as a first, rather than last, resort with borrowers in arrears.
    The FSA said it would publish proposals this autumn after a widespread review.
    "The FSA continues to take a robust position with firms as soon as we have evidence of wrongdoing and also to ensure borrowers are treated fairly throughout the lifetime of their mortgage," said a spokeswoman.
    But the MPs in their report said they were shocked at what they perceived to be the FSA's "leisurely" approach to enforcing the existing rules governing mortgage lenders.
    "We have heard evidence of charges as high as £35 from some lenders for simply sending a letter or making a phone call, and charges as high as £150 for a visit from a so-called 'debt counsellor'," said John McFall, chairman of the committee.
    "Such practices are intolerable and are placing additional financial as well as emotional strain on those already struggling to keep a roof over their head," he added.
  • ALIBOBSY
    ALIBOBSY Posts: 4,527 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Mind you my understanding is the % of those that default on mainstream loans and so called sub prime in this country used to be about the same level (haven't seen any figures from the last couple of years yet so may have changed) so the extras they add on always seem disproportinate to the actual (rather than perceived) risk.

    ali x
    "Overthinking every little thing
    Acknowledge the bell you cant unring"

  • opinions4u
    opinions4u Posts: 19,411 Forumite
    edited 22 August 2009 am31 8:38AM
    ALIBOBSY wrote: »
    Mind you my understanding is the % of those that default on mainstream loans and so called sub prime in this country used to be about the same level (haven't seen any figures from the last couple of years yet so may have changed) so the extras they add on always seem disproportinate to the actual (rather than perceived) risk.
    In the "good times" the gap between the two was much narrower. But at times of economic stress the risk profile of the sub-prime/high LTV borrower increases massively compared to the mainstream.

    Google half year reporting for Brandford & Bingley and Northern Rock for starters and take it from there.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.9K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.