In its annual accounts for the year ending March 31 2010, the first and second charge mortgage lender says the group received formal notice of the FSA’s decision to commence an investigation into aspects of its arrears handling and lending practices on July 31 2009.
It says the group is co-operating fully with the on-going investigation.
Its accounts also show the group has identified an anomaly in its mortgage administration system in respect of the determination of the amount due by some customers for early settlement of their mortgage, which has resulted in customer detriment.
The group says it has resolved to undertake a redress programme for those FSA regulated mortgage customers and unregulated mortgage customers affected.
its accounts say: “As a result of the above the directors currently estimate that the group is likely to incur £9.4m of costs, comprising £1.4m in respect of costs already incurred and £8m in respect of further costs that could be incurred, relating to legal and professional costs, a potential fine and costs implementing any redress programme.”
The Essex based lender filed its accounts on December 9 2010 and it is not known whether the FSA has taken any action against the lender or intends to.
Swift Advances is also subject to a similar industry investigation being conducted by the Office of Fair Trading into the practices of lenders in the second charge mortgage market. Its accounts says it is also co-operating fully with this investigation.
It accounts say: “On November 10 2010 the OFT advised that it is minded to impose requirements under section 33A of the Consumer Credit Act 1974 in relation to activities which are conducted under Swift Advances and Swift Securities Limited credit act licences.”
Swift Advances is regulated under the Consumer Credit Act in respect of second charge lending and Swift 1st is regulated by the FSA.
GMAC-RFC, Kensington Mortgages and Redstone Mortgages, have all been fined for arrears management failings and the FSA has revealed it is investing a further five firms.
When contacted by Mortgage Strategy Swift was unavailable for comment.
The FSA says it cannot comment on individual cases.