FSA fines a third mortgage firm for failures in arrears handling
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The Financial Services Authority has fined a third client of mortgage servicer HML for poor treatment of customers in mortgage arrears.
Redstone Mortgages has been fined £630,000 for unfair treatment of clients facing mortgage arrears.
The regulator has not made any link between Redstone’s failings and HML.
Redstone has agreed to redress clients who were charged unfair or excessive fees while they were in arrears.
It is estimated that this could cost the firm up to £500,000.
The FSA identified a number of serious failings at Redstone bet-ween January 1 2007 and August 5 2009 in relation to arrears handling processes and in its dealings with customers in arrears.
During that time the company did not originate mortgages itself but purchased loans from non-bank specialist lenders that primarily dealt with self-employed and credit-impaired borrowers.
In April Kensington was fined £1.23m for the unfair treatment of borrowers in arrears and ordered to pay redress of up to £1.07m.
This followed GMAC-RFC’s £2.8m fine last October for hitting borrowers in arrears with charges that the regulator deemed to be excessive and unfair.
It was forced to pay up to £7.7m in redress. Both lenders were also customers of HML.
A spokeswoman for Redstone says it works with a number of third-party servicers.
She says: “As noted by the FSA in its final notice we have been addressing its Treating Customers Fairly concerns since late 2008, and have made significant improvements to our arrears and mortgage litigation procedures.”
A spokesman for HML says it can’t comment on its clients.
Last week HML announced plans to shed 80 jobs because it says it has seen a 10% reduction in the number of arrears cases it is managing on behalf of its clients.
