Changes In Managing Mis-sold Mortgages

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Kensington Mortgage Company has been penalized of almost £1.225 million for treating their customers unfairly resulting to mis-sold mortgages complaints of some clients facing mortgage arrears.  The Financial Services Authority (FSA) revealed numerous serious failings by Kensington Mortgage Company, that occurred between January 1, 2007 and October 31, 2008 regarding its mis-sold mortgages complaints handling processes and in its dealings with customers’ arrears.

The customers’ fees consist of the fee for a return direct debit that was charged regardless of how many times the direct debit had been returned unpaid and an excessive fee for cancelled direct debits which failed to reflect administrative costs as well as an early payment charge on mortgage balances which included arrears fees and costs within that balance.  The mentioned firm also did not acquire reasonable care to set up and handle its matters responsibly and effectively, and ensure adequate risk management systems.

The management information of Kensington Mortgage Company directed at the performance of the firm’s mortgage book and the productivity of the business instead of the good welfare of their customers that wanted to have their own home.  Kensington qualified for the 30% discount under the FSA’s settlement low cost scheme.  Without the discount, it’s fine for mis-sold mortgages would have been 1.75 million.  The FSA has also reported the Kensington Mortgage Company has made significantly improvements to its arrears, managing customers’ issues with their mis-sold mortgages, and also repossession processes ever since the early part of 2008.

Numerous mortgage companies can still be fined, just like Kensington even though they are not guilty of mis-selling.  Despite low interest rates looking like they will stay in place for the coming months and a new government in place, many families are in desperate monetary situations.  In the new study completed by the charity institution, it established that a lot of families were resorting to other sources of credit just like credit cards to fund their mortgage payments.

Part of the FSA’s regulations governing mortgage advice state that mortgage agents need to look into the affordability of any proposed mortgage and keep evidence of how it was checked.  Many mortgage advisers gave total disregard for affordability and utilized self certification mortgages to acquire borrowers higher mortgage loans than what should have been given originally according to their suitability.  The survey carried out by the charitable institution showed 6% of participants responsible for rent or a mortgage admitting they had used a credit card to maintain their monthly repayments over the past years.

This is a surprising revelation and discovery and it is completely vital that every single person using credit cards like this seeks advice urgently to have the help they have to guarantee they don’t lose their home.

 

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