Mortgage arrears charges are a growing concern

As more people face mortgage arrears there’s growing concern over the arrears charges made by many lenders.

As Hannah Skenfield of moneysupermarket.com comments ‘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.’

The FSA (Financial Services Authority) requires mortgage providers to treat customers fairly, but with such high and varied charges being levied on those with mortgage arrears it seems hard to see how lenders are adhering to this.

Typically lenders charge £30 or more for a returned cheque or direct debit – including Alliance & Leicester, Halifax, Lloyds TSB Cheltenham & Gloucester, NatWest, Royal Bank of Scotland and Northern Rock.

There are then further charges made each month the mortgage falls into arrears, compounding the problems.

If you are struggling with your mortgage then approaching your lender is a positive step.

You can also get debt advice through such as the Citizens Advice Bureau or other debt management advice companies.

Debt, left unchecked, can quickly get out of control, so if you are concerned about rising debt problems then the sooner you take action the better.

Be aware that lenders will often charge for debt counselling or arrears services.

For example Alliance & Leicester will charge £25, Abbey £79,90 and Halifax £100.

As Hannah Skenfield adds ‘Obviously lenders are not charities, but no one wins if they continue to burden customers with more fees and debt.’