mis-sold mortgages

Surveyor jailed for mortgage fraud

Thursday, July 28th, 2011

Today Mary-Jane Rathie a chartered surveyor with the firm Ashdown Lyons was jailed for six years for taking bribes to over value properties in a mortgage fraud operation.

Included in the bribes were a Bentley Continental car, Range Rover Sport and cash to a value of £900,000.

Royal Bank of Scotland lent £10 million pound on mortgages over five properties that were not worth anywhere near that amount.

Rathie worked in conjunction with a fraudster who used the name Joanne Pier falsely and has since disappeared.

Rathie was found guilty of five counts of fraud and of concealing criminal property in 2007 and 2009.

Judge Timothy Pontius said to Rathie: “It’s nothing short of a tragedy for a woman of your intelligence, qualifications and many years of exemplary hard work to appear in the dock convicted of crimes of very serious dishonesty.

“But they reflect an abuse of professional integrity and also a shocking level of greed. It is naive in the extreme to expect anyone to believe that you thought they were gifts from a very wealthy and generous woman with no strings attached.”

This just goes to show that mortgage surveyors are open to bribes and it is suspected that many have worked in conjunction with brokers to obtain higher valuations to make deals more attractive to their clients.

Have you been a victim of a mis sold mortgage? Contact us today to see how we can help.

Tags: ashdown Lyons, mary jane rathie, mis sold mortgage, mis-sold mortgages
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Northern Rock Former Executives Fined

Wednesday, April 14th, 2010

Today the Financial Services Authority fined David Baker, former deputy chief executive of Northern Rock Plc, £504,000 and Richard Barclay, former managing credit director at Northern Rock, £140,000.

As well as the fine Baker has also been prohibited from performing any function in relation to any regulated activity. And Barclay has been prohibited from performing any significant influence function at an FSA-regulated firm.

Between January 2004 and March 2008, one of Baker’s responsibilities was accurate internal and external reporting at NR.

He had overall responsibility for much of this time for the firm’s debt management unit which managed its secured loan book.

Despite becoming aware in January 2007 that there were 1,917 loans omitted from the mortgage arrears figures, Baker failed to escalate the information internally and agreed a course of action which resulted in the loans not being reported.

He also made misleading statements regarding these impaired loans to external stakeholders, including market analysts, quoting inaccurate figures. If the 1,917 loans had been reported as being in arrears, the figures would have increased by approximately 50%.

Alternatively if the loans had been reported as in possession, the number would have increased from 662 to 2,579 cases.

As managing credit director of the DMU, Barclay was directly responsible for the provision of accurate management information concerning loan arrears and property possessions.

He knew that the firm’s arrears position enabled senior management within NR, analysts and the FSA to form a view of NR’s asset quality, but failed to ensure that the management information reported by the DMU was accurate despite warning signs at an early stage.

Although it is not possible to calculate the exact extent of this mis-reporting, if the correct figure had been reported, the arrears figures would have been significantly worse and closer to the Council of Mortgage Lenders average over an extended period of time.

Tags: fsa fines, mis sold mortgage, northern rock fined, richard barclay
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Mis-sold GMAC Mortgage

Monday, March 22nd, 2010

Tens of thousands of mortgage customers will be entitled to compensation after the city watchdog fined a lender for hammering those in arrears with excessive charges.

GMAC which was previously the one of the top ten largest mortgage providers has been fined a huge £2.8 million by the Financial Services Authority.

Customers who had fallen behind with payments have been treated “unfairly” by GMAC, say the FSA and now the mortgage lender must repay up to £7.7 million, plus interest to more than 46,000 borrowers.

The FSA have said that this case “sets a precedent” which indicates that any others that may have been treated with such disregard may also be entitled to similar compensation in future.

The FSA found four key failings with GMAC:

Excessive and unfair charges

Poorly-designed repayment plans

Inadequate training of mortgage staff

Repossessing before considering the alternatives

The FSA have warned lenders that action will be taken against those lenders that treat struggling borrowers unfairly. The regulatory body has identified five lenders that have broken the rules but GMAC is the first example of action being taken and public censure.

Compensation

There are three arrears fees for which GMAC will have to pay compensation:

Non-direct debit fees which are usually charged when you pay by cheque or bank transfer to cover administration costs which are levied on customers when they did not make a payment. This equals an average refund of £117

Early repayment charges which are usually applied when you pay off a mortgage before the end of an introductory period. These charges are applied to the portion of the loan in arrears as well as the whole loan meaning customers paid twice. This equals an average refund £14

Borrowers have also been charged part of the solicitor’s instruction fee which was more than the actual cost. This equals an average refund £45

The FSA is unsure of the total number of customers who have been affected, however, it is thought to be somewhere between 46,000 and 114,000. The FSA only has figures for the total number of individual charges that need refunding; this is currently at 114,000. Still, many homeowners will be entitled to multiple refunds.

GMAC released a statement to say, “We apologise to customers affected. We have established a customer redress programme. Whilst our arrears charges were in line with the market, in hindsight, we fully accept liability for certain fees. Our estimates of the costs were not proportionate to the additional administration required. We will be writing to customers who incurred these charges and will re-credit the charges plus interest.”

Tags: mis-sold ge money mortgage, mis-sold gmac mortgage, mis-sold rooftop mortgage
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FSA to investigate RBS over customer complaints

Friday, February 26th, 2010

In January 2010, the Financial Services Authority informed the Royal bank of Scotland that they intend to investigate the bank in regards to the way it has dealt with customer complaints. The RBS and all its associated companies have said that they will co-operate fully with the FSA investigation. However, the scope of the investigation, including which subsidiaries will be affected, is not yet known. No comments have been made by RBS representatives as they would like to keep this information confidential.

The Office of Fair Trading has also stated that they are at the early stages of carrying out their own separate investigation into the Royal Bank of Scotland; the specific nature of the investigation ahs not yet been commented on but it is thought to be in relation to the provision of loan products and anti-competitive business conduct. They have advised that they will not be in a position that allows them to conclude whether or not they consider the law to have been infringed until they have assessed all the evidence they gather on completion of their investigation.

The FSA have said publicly that all companies and the way in which they handle complaints is now a priority to them. They will be considering this issue further in the upcoming future.

Tags: complaints, fsa, mis sold mortgage, rbs
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Natwest mis sold mortgages

Friday, February 26th, 2010

Clive had a mortgage with Northern Rock and in 2008 his fixed deal ran out raising his monthly payments from 600 a month to 1100 interest only.

Clive could not afford the new payments, with the cost of living rising and with his hours being cut in work. Clive went to NatWest where he had a personal account and who then offered him a new deal albeit with a high interest rate.

Clive mentioned to the mortgage advisor that he heard rates were likely to drop but was told that Natwest’s rates would stay the same regardless of the Bank of England’s rate and advised Clive that it was unlikely any other lender would drop either for the foreseeable future and that they were offering a good deal.

Natwest surveyed Clive’s property and he believed substantially undervalued it, when in comparison with similar properties in his area. With looming financial pressure and on receiving the valuation of his home Clive became panicked by the advisors cautionary words.

Clive accepted the Natwest’s mortgage offer largely based on the advice that it was unlikely he would get a mortgage offer anywhere else as he had such little equity in his property and there was a risk it would drop lower.

6 months later Natwest’s interest rates lowered and Clive attempted to renegotiate a deal. He was told that with such little equity in his property he did not fit Natwest’s criteria despite already having a mortgage with them. When Clive insisted to speak to someone at Natwest about a mis-sell he was told that the advisors would never have given him this advice and left him with no other options.

Tags: mis-sold natwest mortgage, northern rock mis-sold mortgages
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