The stress of mortgage arrears are being made worse by excessive charges being made to those who fall into arrears and in many instances charges go beyond the covering administrative costs. The damming evidence came from the MPs Treasury Select Committee
The government in the UK has put mortgages high on the agenda with a number of schemes aimed at helping people keep their homes when they face mortgage difficulties. The latest budget saw Chancellor of the Exchequer, Alistair Darling, pumping £50billion an initiative to guarantee any mortgage-backed securities
The latest report from the Treasury Select Committee is calling for harsher action against some mortgage companies. The Treasury Select Committee urged the Financial Services Authority to "raise its game" against companies that are not treating consumers fairly. It also urged strong action against those companies that are actually making a profit out of misery. It said some other firms charged £150 for a visit from a debt counsellor.
The group of MPs found that these practices were "intolerable", and it called on the FSA to take a much more robust stance in tackling the charges. The FSA at this time does not name and shame the mortgage companies who have been found carrying out these practices. This lack of action seemed to put the regulator on the side of the lenders and not in the interest of consumers.
John McFall, chairman of the committee, said: "We suspect that the small number of cases being brought against lenders making excessive arrears charges are merely the tip of the iceberg.
"This is why it is so important that lenders are compelled to open up their books and justify their charges, while the FSA must be prepared to take decisive action where it finds evidence of wrongdoing."
© Housing Market News by The Little House Company