The GMAC-RFC mortgage lender has been fined £2.8m by the Financial Services Authority (FSA) for mistreating customers who fell into arrears. It has also been told to repay £7.7m, plus interest, to 46,000 of its borrowers.
The FSA said the company levied unfair charges on borrowers who fell behind with their repayments and was too eager to repossess them.
After setting up as a mortgage business in the UK in 1998, GMAC-RFC grew rapidly to become one of the UK's largest mortgage lenders, but it stopped making new loans last year.
The FSA's investigation of the company's lending practices between October 2004 and October 2008 found that:
- charges for dealing with people in arrears were "excessive and unfair"
- repossession proceedings were started before all other alternatives had been considered
- GMAC staff were not properly trained in dealing with arrears cases and repossessions.
It would be better if none of this mess had happened.
I would like to take this opportunity to thank* the greedy bankers, the clueless sub-prime borrowers, the so-clever-they’re-stupid financial engineers, Hank ‘Nobody Will Really Mind If Lehman Goes Bust’ Paulson, the dollarholic People’s Bank of China, Gordon Brown’s dead eye, the credit rating agencies who wouldn’t know a bad risk if it painted itself purple, stripped naked and danced on top of a harpsichord singing ‘bad risks are here again’, and anybody else who may have been responsible for the credit crunch and recession.
Without you, I’d not be getting the comically cheap flat I’ve just today completed on – a GMAC-RFC repossession, not that I’d even heard of them when I made the offer – nor would I have scored such a dirt-cheap mortgage.
I’ve been looking for a flat, on and off, for over two years - and very nearly bought at the peak. Phew.
And now, if you’ll excuse me, I think the furniture industry needs a fiscal stimulus. But not before I have an alcoholic one.
* Thanks also to C&L, for too many reasons to mention.