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Mortgage arrears charges short on sympathy

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by Gill Montia

Moneysupermarket.com is continuing its campaign against the mortgage arrears charges that add to the burden of households in financial difficulties.

The website’s latest survey shows Lloyds TSB and its Cheltenham & Gloucester unit charging a hefty £206 for repayments three months or more in arrears, while GMAC and Abbey top the tables in the one month’s arrears category, at £50 and £40 respectively.

Commenting on the situation, moneysupermarket’s mortgage channel manager, Hannah Skenfield, says: “It’s outrageous that borrowers who are already struggling and who have fallen behind with their mortgage repayments are being hit with such high fees.”

She goes on to point out that many lenders have been bailed out from a similar position making unreasonable charges a “bitter pill” to swallow.

Under Financial Services Authority rules, cases of financial hardship must be treated sympathetically by lenders.

However, the research shows inconsistency in the charges levied by different lenders, indicating that sympathy and fairness are not always calculated in.

According to moneysupermarket, Halifax charges £35 for every call or letter connected to mortgage arrears and levies a £100 fee for debt advice, which can be obtained free through the Citizens Advice Bureau or Consumer Credit Counselling Service.

By comparison, RBS charges only £30 for arrears of three months or more and provides debt advice at no charge.

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News posted: August 18, 2009

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