Complaints over mortgage costs rocket
December 24, 2007
According to a recent report the level of complaints relating to mortgage costs in the UK have rocketed over the past year, and experts state that this is a clear indication that mortgage providers need to take action when it comes to fees and services. The surge in complaints over the past year relates to a range of costs and fees, including exit fees, administration charges, and arrangement fees charged by some mortgage companies for setting up the mortgage.
The study was carried out jointly by the Council of Mortgage Lenders and Vertex Financial Services. The reports claimed that complaints relating to fees and costs had more than doubled in the past year, and that complaints relating to over-charging had hit an all time high after soaring by 300%. This information is backed up by separate figures that were released recently by the Financial Ombudsman Service, claiming that there had been an overall 11% increase in complaints relating to the mortgage industry, much of which related to costs and fees.
One official from Vertex stated: ‘With three interest rate rises already over the past year it is perhaps not surprising that over-charging complaints have risen so dramatically but service levels must improve to ensure that this is kept in check. Given the impact of the credit crunch, next year’s survey is likely to see many more lenders with higher arrears, repossessions and debt collection problems.’
He added: ‘Productivity and efficiency are both showing slight improvements overall, suggesting that progress is now being made as lenders absorb regulatory costs, but it will take time.’ A CML spokesman said: ‘In this very challenging environment, it is even more important for lenders to understand their cost base and to ensure they operate a tight ship if they are to ensure effective resource allocation.’
Alan Wright
24th December 2007
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