Mortgage News
Redstone gets £600k fine for arrears failings
The FSA has fined mortgage portfolio buyer Redstone Mortgages £630,000 for shoddy treatment of customers struggling with mortgage arrears.
The financial watchdog found a number of ‘serious failings’ by Redstone’s arrears handlers, including the expectation on staff to take high call volumes, leaving them no time for complex arrears discussions.
The portfolio buyer’s charges were unfair and excessive, said the FSA, and included unlimited charging for returned direct debit payments, alongside adding late fees to the mortgage balance and charging for home visits – all issues condemned in the latest MMR consultation.
The problems occurred between 1 January 2007 and 5 August 2009 and included a ‘one-size fits all’ approach to arrears negotiations, unnecessary use of litigation and ‘repetitive, excessive and confusing correspondence,’ said the FSA.
Redstone Mortgages has satisfied the FSA on its current TCF procedures and bought 15,000 loans from non-bank specialist lenders worth £1.28bn, since authorisation in 2005. Redstone qualifies for a 30% discount, down from £900,000. Redstone is the third lender referred to enforcement, following similar arrears handling notices to GMAC-RFC and Kensington.
An FSA spokeswoman said she expected ‘a few more to come’.
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