Lenders impose weekly fees on those in arrears
Published 17/04/2010 | 05:00
A PROBE by the Financial Regulator of how lenders are treating mortgage holders in arrears has found that some subprime lenders are imposing weekly charges on those struggling to meet repayments.
The regulator is expected to crack down on the practice of lenders imposing fees and charges on people who are in arrears with their mortgage.
Subprime lenders charge homeowners who are in arrears every time they send them the likes of a solicitor's letter.
It is believed that staff in the regulator's office have found that some subprime lenders are sending out letters on a weekly basis to cash-strapped homeowners who are not meeting repayments.
Financial Regulator Matthew Elderfield told an Oireachtas Committee earlier this week that he was concerned about the "frequency of arrears charges". He said some of these charges were "excessive".
"We have written to the financial institutions about excessive charges. The letters are clearly not working. We will be taking some action in this space shortly," the regulator said.
Some lenders have fixed charges of €15 a month when people miss repayments, while others charge up to €45 when they send solicitors' letters warning about the arrears.
Reminder letters for missed payments can generate a charge of €10.