FSA & Blemain

[transformer999]

I wanted to start this thread as it involves Blemain..plus their under handed tactics....also the findings below include info on Monarch Recoveries....something which I have some info and will be posting up.

The fine the FSA gave Mr Moser in my eyes is so small.....and should have been much much more.....

[transformer999]

Re: FSA & Blemain

I am currently dealing with Blemain...and trying to get them to tell me how much money I need to pay on top of my contractual payments each month to clear my arrears....so far they have been as useful as dog poo.

I have given them until tomorrow to respond as I have a hearing on 17 Feb 13...and need to get my side 100% cemented and strong before then....but there is a lot of info in the above attachment that I hope will be very helpful for me.

[transformer999]

Re: FSA & Blemain

Depending upon the account circumstances, after a mortgage account had been in arrears for two months it could be transferred to Monarch Recoveries. Monarch Recoveries was the Group’s in-house debt recovery company.

This was not, however, made clear in correspondence with clients. Mr Moser considered that this system would encourage customers in arrears to bring their account back to within "a contractual level” and considered that the involvement of an ostensibly separate debt collection agency would encourage the customer to pay.

Mr Moser was aware that a fee of £150 was charged to the account for the transfer from collections to Monarch Recoveries, which figure was benchmarked against competitors who used to outsource this business to external agents. This system was set-up pre-2004 and was in place until 2010 without any review being undertaken as to whether it was (or remained) appropriate.

[transformer999]

Re: FSA & Blemain

I really feel serious that once my possession claim has been over and done with that I should a claim against Blemain....bloody hell what I would put in my POC would be a mile long....for all the cock ups they have done...and continue to do.

My hands are tied at the moment as I cannot afford legal advice....so I am defending the case more or less on my own...but after the hearing next year I believe that I have a good chance of a successful claim against Blemain using the s140...and their failings on following the 10 principles of the FSA code....there is so much that I could include in my claim.

But I will not do anything until I have researched 10000%.....but my gut is telling me to do this.....and I have a good feeling that maybe Blemain may just come to an agreement with me soon...if not then no worries...I have plenty on them as it is.

[transformer999]

Re: FSA & Blemain

Whilst my possession claim is still live with Blemain I think I will send an email that is given in the FSA findings above to kate.tuckley@fsa.gov.uk....just to highlight what breaches I believe Blemain have done and continue to do.

I may not get far but at least I want to bring it to their attention that what the FSA have fined Cheshire Mortgages for which Blemain are one of their representatives...that these breaches are continuing to occur.

Just a short summary of events I think will be sufficient to kate at the FSA....as I am curious to see what response I get from her....seeing as this fine Mr Moser received is still hot off the press.

[transformer999]

Re: FSA & Blemain

I am not sure if I am going to get anywhere but thought I should at least voice my opinion and thoughts to the FSA.

I have sent kate at the FSA an email outlining my possession claim against Blemain and have asked for her thoughts and any help she may be able to offer. I am not going to hold my breath...but there is no harm in trying to get as much as help I can and also highlight Blemain's tactics....especially after the recent FSA findings on them and Cheshire Mortgages.

The main thing in the FSA findings were that customers were being treated unfairly....and also that Blemain were using their in house people disguising themselves as Monarch Recoveries.

I fit under both of these categories and these are the two areas I am going to highlight as big as Trafalgar Square. The OFT sent me a complaint form quite a while ago as they were going to investigate my complaint against Blemain...but not sure how far that went...but I do know that Blemain's cca licence has still not been re-newed so they must be under some kinda investigation and Monarch Recoveries just being one these investigations has come to light.

Mind you I think they should have been fined much more than that......but I will post up as things go along about my progress with the FSA.

[transformer999]

Re: FSA & Blemain

FSA fines impaired credit lender

FSA has fined a mortgage lender, Cheshire Mortgage Corporation Limited, and fined and banned its CEO and its compliance director, for failing to treat customers fairly in the sale of mortgages and arrears handling. The firm, which operates in niche markets including lending in the impaired credit market, failed to show that over a five-year period from the start of regulation of mortgage lending it treated customers fairly and sometimes treated them unfairly. Its lending practices did not test affordability and plausibility of information. Also compliance systems and controls did not identify these problems nor the fact that the firms’ lending guidelines were sometimes breached or waived by senior management. FSA also found a number of practices which meant the firm treated customers in arrears unfairly. Following a Skilled Persons report, the CEO, Henry Moser, has decided to step down. FSA fined Mr Moser £70,000 and has fined Andrew Lawton, the MLRO, £13,500 and banned him from holding any "significant influence function". It found Mr Lawton was knowingly involved in compliance breaches, whereas Mr Moser has made concerted efforts since 2008 to achieve high regulatory standards for the firm. (Source: Final Notice – CMCL, Final Notice – Henry Moser and Final Notice – Andrew Lawton)

[transformer999]

Re: FSA & Blemain

Mortgage arrears, repossessions and Treating Customers Fairly



Treating Customers Fairly (TCF) will continue to be a key priority for the Financial Services Authority (FSA) in 2009. All firms were set a deadline of the end of December 2008 for being able to demonstrate to the FSA (and satisfy themselves) that they are consistently treating their customers fairly. This has recently been reinforced in the mortgage arrears and repossessions context by the FSA’s ‘Dear CEO’ letter (published on 27 November 2008), which states that mortgage firms must have policies and practices that achieve the outcome of fair treatment for customers in arrears or facing repossession and that are consistent with the Principles for Businesses and the Mortgages and Home Finance: Conduct of Business (MCOB) Rules.


The FSA has made it clear that it intends to use its full range of powers if weaknesses are identified in the way that lenders are handling arrears and repossessions, particularly if it involves customers in vulnerable financial situations or with impaired credit ratings. The Dear CEO letter followed the FSA’s publication (in August 2008) of the results of its review into mortgage arrears practices and repossession handling, which revealed that firms:

• were failing to consider the individual circumstances of its customers;
• were imposing unfair charges;
• were too willing to institute court proceedings; and
• did not have adequate systems, controls and training arrangements in place.

The FSA also outlined a number of examples of good and bad practices and it will expect firms to have considered them now. It will also expect firms to have made appropriate changes to their procedures where necessary.



The need for firms to have written policies and procedures in place to ensure that customers are treated fairly is a clear regulatory requirement. The Dear CEO letter is the ‘second warning to lenders from the FSA in recent months’ and clearly highlights the importance that firms and senior management should be giving to this issue. The FSA expects firms to review their policies and procedures to ensure they are compatible with MCOB and the TCF requirements and to identify and address any weaknesses as a matter of urgency. Firms should:

• critically review their current arrears policy;
• critically review current management practices and procedures; and
• assess if, in practice, customers in arrears are being treated fairly by initiating a review.

The conclusions reached and any proposed action to deal with any weaknesses must be communicated, by senior management, to the FSA by 31 January 2009.
Although the Dear CEO letter does not amount to formal guidance from the FSA, failure to comply with its requirements is highly likely to result in enforcement action. The FSA has stated that ‘where we find lenders are not complying with our requirements we will make appropriate and properly targeted use of our existing regulatory tools, which may include enforcement action’.


In light of this, firms and senior management will come under greater scrutiny to demonstrate that their arrears and repossession practices and procedures are TCF and MCOB compliant. Firms should:

• undertake a close examination of ?? the level of their
• arrears charges and the circumstances in which they are applied;
• ensure adequate records are retained of contact with customers facing difficulties;
• assess that the information provided to and collated about their customers is adequate; and
• ensure their staff remuneration structures are TCF friendly.

Firms will also need to have robust and rigorous systems and controls in place to ensure adherence to their arrears and repossession-handling procedures and undertake regular reviews to assess and make sure that customers are, in practice, being treated fairly. Many lenders will have already implemented TCF procedures. However, the increase in the number of customers facing repossession means that firms should be reassessing such practices to guarantee they are flexible, explore alternative repayment solutions and not be overly zealous when starting court proceedings. The nature of TCF means that firms must continue to reassess their policies and practices to ensure they meet the needs of their customers in the current economic climate.



The Dear CEO letter clearly emphasises that senior management will need to consider, and be able to demonstrate that they have considered, the issues raised. If the firm is found not to have critically reviewed its arrears and repossession practices, senior management are likely to find themselves under intense scrutiny from the FSA. In each of the areas the FSA has asked firms to review, senior management need to make sure that appropriate action has been taken. This is particularly important given that the FSA has stated that firms will suffer ‘meaningful consequences’ if they fail to improve standards of conduct.


In light of recent increases in the level of fines that firms in enforcement action have been subject to, firms choosing to ignore weaknesses in their arrears and repossession practices, or failing to act promptly to address those weaknesses, do so at their peril. There is also a real risk of enforcement action against individual members of senior management if they have been associated in a serious failing by the firm.


Given that the assessment of TCF outcomes should be firmly embedded within the ARROW framework (advanced, risk-responsive operating framework) with effect from January 2009, FSA supervisory teams will be keen to explore the practical steps firms have taken to tackle TCF issues. The FSA is also likely to undertake further mortgage-related thematic work and themed visits during 2009 to identify the scale and nature of any remaining risks.
As Sarah Wilson (FSA director, TCF and insurance sector leader) stated on 18 November 2008:



‘The TCF initiative covers not just our Principle 6 (a firm must pay due regard to the interests of customers and treat them fairly) but it is also related to Principle 2 (on conducting business with due skill, care and diligence), Principle 3 (taking reasonable care to organise and control affairs responsibly and effectively with adequate risk management systems), Principle 7 (on client information needs) and Principle 9 (on suitability of its advice and discretionary decisions for customers). Moreover, we have made clear our view that difficult market conditions pose particular risks to the fair outcomes for customers. The FSA therefore must and will continue to take decisive action where we find (actual or potential) customer detriment’.



In the current economic climate, the fair treatment of customers in mortgage arrears or facing repossessions is likely to be a key focus for FSA supervisory and enforcement activity in 2009. Reviewing arrears and repossessions policies, procedures and current practices to ensure that customers are being treated fairly should now be a matter of utmost urgency for firms and their senior management.

[transformer999]

Re: FSA & Blemain

New FSA proposals on the fair treatment of customers in arrears



Regulation of the UK mortgage market, and in particular the need to ensure that customers in arrears are treated fairly, is proving to be a key priority for the Financial Services Authority (FSA) in 2010. Partly in response to political pressure to the effect that – in the present climate – the current regulatory framework is ineffective in protecting struggling home owners, the regulator has now proposed a range of amendments to the Mortgage Conduct of Business Rules (MCOB) that are likely to affect firms’ future policies and procedures.


The proposed amendments and the background to them are set out in two FSA papers:

• a discussion paper released in October 2009 (Discussion paper 09/3: mortgage market review; DP 09/3), which outlines key issues arising from the FSA’s review of the mortgage industry and its thematic work with firms in 2008 and 2009; and
• a follow-up consultation paper dated January 2010 (Consultation paper 10/02 – mortgage market review: arrears and approved persons; CP 10/02), which sets out the FSA’s specific proposals for regulatory change.

Recent commentary on the regulatory framework has also come in the form of a report produced by the House of Commons treasury committee in July 2009 entitled Mortgage arrears and access to mortgage finance, which contains strong criticism of the FSA’s regulation of the mortgage market to date, and a consultation paper produced by HM Treasury in November 2009, which makes a number of proposals in relation to the regime governing lending permissions and second-charge mortgages.
Together these documents provide a road map for where regulation of the mortgage market is likely to go in the next few years. The proposals on arrears management and repossessions handling, summarised below, could be particularly significant for firms.


Lender flexibility and forbearance
In its July 2009 report the treasury committee expresses particular concern about a lack of flexibility and forbearance by those lenders operating within the subprime and specialist lending sectors. In DP 09/3 and CP 10/02, the FSA also picks up on this issue, suggesting that it thinks lenders have to date focused too narrowly on recovering arrears and have been moving too quickly to repossession proceedings without first considering all other available options.


To deal with this, the FSA is now proposing to replace the existing framework, which is essentially based on general principles, with a prescriptive and more comprehensive list of actions that lenders will be obliged to take in relation to customers experiencing financial difficulties. For example, guidance on MCOB 13.3.4 will, under the proposals, be converted into a set of rules prescribing what a lender must do in seeking to reach an agreement with customers in arrears over the method by which those customers will repay any shortfall. If the FSA’s proposed amendments are implemented lenders will in future have clear obligations to:

• give customers a reasonable period to consider any proposals for payment that are put to them;
• give customers adequate information about any applicable government schemes to assist borrowers in payment difficulties; and
• consider whether it would be appropriate to do one or more of the following to help the customer in paying off the arrears:
  • extend the term of the loan;
  • change its type (eg switching capital to interest only);
  • defer payment of interest due;
  • treat the payment shortfall as if it were part of the original amount provided (notwithstanding that capitalisation of a shortfall should never be automatic); and/or
  • make use of any government forbearance initiatives in which the lender participates.
  
  

Mortgage arrears charges
The treasury committee has been highly critical of what it considers to be excessive charges levied on borrowers in arrears, expressing concern that some lenders have been using these charges as an alternative profit stream rather than to recoup the additional administrative costs incurred in dealing with customers in arrears.
In DP 09/3 and CP 10/02, the FSA also demonstrates a renewed focus on this topic. Whereas previously the FSA has relied on guidance such as the ‘good and poor practice’ examples on its website to flesh out the requirements of MCOB 12 in relation to charges, it has now announced an intention to follow a more interventionist approach to regulating charging practices. This is to be facilitated by a number of proposed amendments to MCOB set out in CP 10/02. If implemented, these amendments will make clear that – among other requirements – firms have a regulatory obligation to ensure that:

• payments from customers in arrears must be allocated first to clearing missed monthly payments and only after such arrears are cleared should monies go to paying off charges;
• lenders must not add early repayment charges onto arrears charges; and
• lenders must not apply a monthly arrears charge to borrowers who are complying with the terms of an agreed repayment arrangement between the borrower and the lender (for example, if the lender has agreed to accept a series of reduced payments to help the customer out of arrears) unless that fee genuinely represents the cost of additional administration work by the firm.

In addition, the FSA is carrying out further detailed review work in relation to arrears charges to ensure that fees reflect the underlying costs of arrears administration and to identify and challenge further practices that it considers may be unfair. The review is part of a wider piece of ongoing supervisory work into the levels of lender product charges and lender charging models, and the FSA has stated that its eventual findings may lead it to establish baseline figures for charges, something it has previously resisted doing.


Record keeping
In CP 10/02 the FSA has also indicated that it is planning to introduce amendments to the record keeping regime set out in MCOB. The principal proposals are that:

• lenders be required to record all telephone calls with their customers; and
• such recordings, and all other records of dealings with customers in arrears or with a mortgage shortfall debt, be retained for at least three years from the date on which the relevant payment or sale shortfall is cleared.

These changes reflect the FSA’s belief that telephone calls are a crucial record of the way front-line staff interact with customers and that call records are therefore essential to understanding whether the customer has been treated fairly.
The amended regime could have a significant effect on some firms’ record keeping practices, particularly those that had until now been meeting – but not going beyond – the express requirements of MCOB 13. To date these requirements have allowed firms to rely purely on the retention of ‘adequate’ records (which has been interpreted by some firms as requiring only the retention of written call notes and correspondence) and have specified a minimum retention period of only 12 months.
In a continuation of the existing rules, firms will still be expected to keep all records readily accessible for inspection by the FSA. Firms will also still need to consider the FSA’s Dispute Resolution: Complaints rules when recording information about customer complaints.


Potential implications for the industry
The FSA’s consultation on the above measures is due to close on 30 April 2010, after which it plans to finalise its proposals for regulatory change with a view to publishing a policy statement in June 2010. Some feedback from the market on the proposals in DP 09/3 has already been gathered and has been set out in Feedback statement 10/1: mortgage market review, released on 23 March.
The key proposals move away from regulation primarily based on principles (which inevitably leads to uncertainty over the exact regulatory requirements) to a focus on specific rules. They serve to emphasise that the FSA is seeking to tighten its grip on the mortgage market and the FSA’s business plan for 2010-11, published on 17 March 2010, indicates that mortgage arrears handling will continue to be a key priority. Against this backdrop, it is increasingly important for firms to have rigorous systems and controls in place to ensure adherence to arrears and repossessions-handling policies.


In areas such as record keeping, where it appears some firms may need to make significant revisions to policy and procedure when the current proposals (subject to any amendments resulting from the consultation process) are put into place, the next few months will afford valuable time to pave the way for those revisions and ensure that the firm’s record keeping infrastructure can cope with what could potentially be a significant increase in the volume of data firms need to retain.
Recent FSA statements have emphasised that the regulator is willing to use the full range of powers available to it to protect customers in arrears and expects firms to be able to demonstrate that they regularly review and critically appraise their procedures for treating customers fairly. There are risks of enforcement action against firms that are found to have weaknesses in their arrears-handling and repossessions practices and, as demonstrated by the recent case of GMAC – which in October 2009 was fined £2.8m and ordered to pay redress to customers of up to £7.7m plus interest – the potential effects of such enforcement action can be severe.

[transformer999]

Re: FSA & Blemain

House of Commons Treasury Committee - mortgage arrears and access to mortgage finance

The House of Commons Treasury Committee has published a report on mortgage arrears and access to mortgage finance. The report is part of the Committee’s enquiry which was launched on 17 June 2009 to look at households affected by the recession and struggling with mortgage arrears and/or at risk of repossession, as well as problems in accessing finance for first time buyers.
Findings in the report include:

• Mainstream lenders are, broadly speaking, complying with the FSA’s mortgage conduct of business rules.
• The Committee is extremely concerned by evidence of a lack of flexibility and forbearance in the sub-prime, specialist and second charge sectors to homeowners in arrears.
• The Committee recommends that the FSA monitors the forbearance policies of mortgage lenders to ensure that repossession is only a tool of last resort.
• The Committee has a serious concern that some lenders are charging high and excessive mortgage arrears fees to customers who fall into mortgage difficulties.
• The Committee is concerned that the FSA’s principles-based approach in the area of mortgage arrears has given far too much flexibility to lenders to interpret the rules as they wish.
• The Committee states that the “seemingly leisurely approach of the FSA in terms of completing its mortgage arrears review and enforcing possible breaches in the rules in the area of mortgage arrears is a matter of grave concern.” The Committee calls on the FSA to spell out clearly in its mortgage market review how it will improve its performance in terms of bringing miscreant firms to book.
• On the naming and shaming of miscreant firms the Committee has concerns that the balance between disclosure to the public and the need to protect firms before they have been found guilty of wrong doing has tilted too far towards the interests of industry.

The Committee calls on the FSA to move quickly to ensure that securitisation agreements already in place do not act as an obstacle to treating consumers in mortgage difficulties fairly.



View House of Commons Treasury Committee - Mortgage arrears and access to mortgage finance, 8 August 2009


I think a lot of the info above will be very useful in my case against Blemain....as they have more or less done everything on this list.