GMAC-RFC to compensate 46,000 borrowers - Mortgages - News - Moneyfacts

News

GMAC-RFC to compensate 46,000 borrowers

GMAC-RFC to compensate 46,000 borrowers

Category: Mortgages

Updated: 29/10/2009
First Published: 29/10/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
GMAC-RFC is to pay up to £7.7 million in compensation to over 46,000 mortgage customers who were found to have been treated unfairly by the firm.

The mortgage lender has also been fined £2.8 million by the Financial Services Authority after serious failings were identified in relation to the firm's dealings with customers experiencing arrears and repossessions between 31 October 2004 and 30 November 2008.

Excessive and unfair charges that did not reflect administration costs and the proposal of repayment plans that did not consider a customer's individual circumstances were amongst the problems uncovered by the regulator.

The company's staff were also said to be inadequately trained in handling arrears and repossessions, while repossession proceedings were found to have been instigated without alternatives having first been considered.

In a statement, GMAC-RFC apologised to the customers affected and said it had worked openly with the FSA to review and revise procedures for managing accounts in arrears.

"Whilst our arrears charges were in line with the market, in hindsight we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required," said the lender.

"We will be writing to customers who incurred these specific charges when in arrears and will re-credit the charges plus interest."

Details of the fees that will be redressed were also revealed, with charges made for the non-payment of a monthly mortgage payment by direct debit when in arrears expected to result in an average refund of £117.

Those that had early repayment charges applied to arrears fees and charges can expect an average reimbursement of £14, while a refund of around £45 is likely in relation to charges made for solicitor's instruction fees which amounted to more than the actual cost.

Compare fixed rate mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Goodbye to the Help to Buy Guarantee

On 31 December, phase two of the Help to Buy initiative will be withdrawn from the market. It’s certainly done wonders for the high loan-to-value sector, so we thought we’d take a closer look at the significance of the scheme and the effect it’s had.

Remortgaging bounces back

Remortgaging has been enjoying a welcome boost in recent months, despite September’s slight dip, with many homeowners capitalising on record low mortgage rates to boost their finances.

Bank of Mum and Dad holds the (house) key

The Bank of Mum and Dad is an important source of finance for many young adults, and it seems that they still hold the key – in more ways than one.
 
Close