Mortgage arrears fees

embee53

I've just joined this site and am keen to start the process of reclaiming bank chares, PPI but wonder if Mortgage Arrears Fees of £40 a time can be reclaimed. Had a bad period a few years ago and many months @£40 plus interest etc mounts up. Anybody got any experience in this please let me know. Thanks Mike.

dunstonh

wonder if Mortgage Arrears Fees of £40 a time can be reclaimed.

Just as bank charges cannot normally be reclaimed, mortgage arrears charges cant be either. There have been some exceptions with a few subprime lenders but if you were with a high street lender then no.

fuuoldself

Check to see what the current fees are. In the last few years most lenders will have reviewed fees and deemed the old ones unrealistic (I think it came from a precedent setting legal decision that made lenders put a 'true' value on the cost to them of you going into arrears).

Work out your total cost of fees for the arrears period(s), say 10 months where £40 was charged, totalling £400, and compare this to their new fees if they have them.

If they now charge £12 for their monthly arrears fees after reducing it, say in the 5th month you were in arrears, that's 5 months where you potentially paid £28 over the odds.

Writing or phoning asking for that £140 back wouldn't be unrealistic.

So the same for any bounced DD fees with your mortgage as well

brown1950

embee53 wrote: »

I've just joined this site and am keen to start the process of reclaiming bank chares, PPI but wonder if Mortgage Arrears Fees of £40 a time can be reclaimed. Had a bad period a few years ago and many months @£40 plus interest etc mounts up. Anybody got any experience in this please let me know. Thanks Mike.

Mortgage arrears fees can be claimed back ! see this article :-

Kensington Mortgages to refund over £1m in unfair arrears fees



Guy Anker
Managing Editor
12 April 2010

MSE Mortgages & Houses guides Print
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Kensington Mortgages must pay over £1 million in compensation after it was fined by the Financial Services Authority (FSA) for hammering borrowers behind on payments with huge charges.
It has been slapped with a £1.225 million penalty for "unfair" practices which included excessive fees for direct debit payments that failed because the borrower did not have sufficient funds in their current account (see the Mortgage Arrears and Redundancy guides).
It must also pay back just over a million pounds in redress as a result.
The FSA has urged consumers in arrears on their mortgage who have been treated unfairly to complain and try to get their fees back, regardless of lender (see the Reclaim mortgage arrears fees MSE News story).
One Kensington borrower who contacted MoneySavingExpert.com got £745 refunded in February after making a complaint long before the FSA's action became public.
Kensington, a major player in the sub-prime market before the credit crunch, is the latest mortgage firm hit with a fine over high arrears charges, with other investigations still ongoing.
GMAC-RFC, the tenth largest mortgage provider pre-credit crunch, was ordered last October to pay compensation to up to 114,000 borrowers hit with unfair arrears fees (see the GMAC mass refunds MSE News story).
Kensington refunds
The FSA identified a number of "serious failings" by Kensington which occurred between January 2007 and October 2008.
In particular, it says the lender applied three "unfair" or "excessive" fees which must be refunded. Kensington says it will contact those affected by 31 May, adding that "no action is necessary".
They were:

• A fee for a returned direct debit levied every time the lender attempted to take payment (in theory, it could have tried any number of times). Kensington says the average refund is £25 per charge.
• An excessive fee for cancelled direct debits which did not reflect administrative costs. Average refund: £8.75 per charge.
• Including arrears fees when determining the balance to calculate an early repayment charge (ERC). If you pay a mortgage off before an introductory deal ends, you usually pay a fee which is a percentage of the total balance, so the higher the balance, the higher the fee. Average refund: £37 per charge.

The FSA says Kensington staff did not treat borrowers fairly, prioritised profit over sympathetic handling of cases and concentrated on clearing arrears quickly rather than agreeing a repayment plan.
A Kensington spokesman says: "We apologise and we are working to redress those affected as quickly as possible. Our charges were in line with the market at the time.
"However, we acknowledge there were certain fees where it was felt that the charge did not accurately reflect the additional work and cost incurred by Kensington. We no longer charge these fees and will be writing to customers who have been affected."
What about other Kensington charges?
While the action against Kensington largely related to direct debit fees and early repayment charges, one MoneySaver got a huge £745 refund from Kensington in February after complaining about a variety of charges, not just those highlighted by the FSA.
Steve Long, from Cumbria, got the cash back after being hit by charges in 2007, 2008 and 2009. Those fees were mainly penalties simply for paying late.
He wrote to the lender in early February and it refunded the cash within a week.
So if you're a Kensington customer hit with any excessive arrears charge, consider making a complaint.
Non-Kensington reclaiming
The FSA launched a crackdown on high mortgage arrears fees in January and is encouraging anyone who feels badly treated to complain. It says poor lender practices centre on the size of fees and how they're charged:

• Excessive fees. One of the clearest examples, the FSA says, is where the charge is higher than the administrative cost to the lender. If it costs £10 to send a letter but the charge is £35, that's £25 too much.
  
  Lenders often charge around £35 per missed payment, £100 for a debt collector visit and thousands in legal and estate agent fees if your property is repossessed (see the Huge mortgage fees MSE News story).
• Unfair charging. The FSA has found numerous examples of firms sneakily finding ways to incorporate charges when they shouldn't. For example, when struggling borrowers are already on a repayment plan.
  
  Also, lenders charging non-direct debit payment fees (to pay for payment processing) when no payment was made, or including arrears charges in the total mortgage balance when calculating an ERC.

How far back can you reclaim?
The Financial Ombudsman Service, the independent arbitrator between firms and their customers, says you can reclaim fees from as far back as you like, as long as you make the complaint within three years of realising you could.
As the FSA has only got tough over the past few months, most people will still be within that three-year time-frame.
If unsure of past charges, make a request to get a list of fees charged from your lender over the past six years under the Data Protection Act. This will cost up to £10.
How do you reclaim?
First complain to your lender setting out why the charges are unfair and ask for your money back. If you are turned away or do not get a satisfactory response within eight weeks, complain to the free Ombudsman service (see the Ombudsman guide).
Martin Lewis, MoneySavingExpert.com creator, says: "As there's no cost, and most people in arrears are in financial hardship, and therefore should be treated with sympathy, I would urge anyone who feels unfairly treated to complain."

magpiecottage

The fees charged should reflect the true cost incurred by the lender.

This is in accordance with FCA principle 8 which requires it deal with any conflict of interest fairly.

I suppose it could argue that time spent dealing with your arrears could have been spent on something else that was profitable and that it could therefore include a commensurate element of profit and if it says that otherwise those not in arrears would be subsidising you. However, an excessive profit would not be and £40 for a standard letter automatically sent by a compluter would seem to be excessive.

Siliquaesid

https://forums.moneysavingexpert.com/discussion/comment/68058966#Comment_68058966

These articles are the result of 5 years of research into the questionable activities of these companies. THere is still a WHOLE load more dirt to uncover, but what I state is PROVABLE and I can provide the documents to do so, in fact I will, to the Police, on Monday 30 March 2015.

Feel free to conduct your own research too, you may well uncover something important.

ENJOY.. Pass it round, post it on Facebook, newspapers where EVER you can. Let's get this VIRAL.

roonaldo

Siliquaesid wrote: »

THere is still a WHOLE load more dirt to uncover, but what I state is PROVABLE and I can provide the documents to do so, in fact I will, to the Police, on Monday 30 March 2015.

Its not a police matter and please dont waste their time. If you feel strongly about this contact the regulator and even they are going to ignore your ramblings.

Janin

That Lender wasn’t was bad as Kensington Mortgages, they set up an arrears arrangement of £350/month extra to clear arrears, then charged £50/month arrears fee on top!