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GMAC-RFC / GMAC-RFC STATEMENT REGARDING SETTLEMENT WITH THE FSA ON MORTGAGE ARREARS CHARGES

GMAC-RFC STATEMENT REGARDING SETTLEMENT WITH THE FSA ON MORTGAGE ARREARS CHARGES

29th October 2009 - GMAC-RFC today confirms that it has agreed a settlement with the Financial Services Authority regarding the company’s servicing of mortgage accounts in arrears and certain associated charges levied between 31 October 2004 and 30 November 2008.

GMAC-RFC commented, “We want to apologise to customers affected. We have worked openly with the FSA to review and revise our procedures for managing accounts in arrears.

“We’ve been able to work quickly as a result of cooperation with the FSA and changes already made to our procedures and training programmes over the last eighteen months. Furthermore, we have established a customer contact and redress programme in relation to certain arrears charges.

“Whilst our arrears charges were in line with the market, in hindsight, we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required. We will be writing to customers who incurred these specific charges when in arrears and will re-credit the charges plus interest.”

Details of fees to be redressed are as follows:

• Charges for non payment of the monthly mortgage payment by Direct Debit when in arrears (average refund £117)
• Early Repayment Charges applied to arrears fees and charges (average refund £14)
• Part of the solicitors instruction fee which was more than the actual cost (average refund £45)

What should customers do?
Customers who have been in arrears and currently have a mortgage with GMAC-RFC or have remortgaged and remain at the same address need take no action. The company will send a letter with details of the redress programme to any customer with a mortgage in arrears who was charged one of the above fees since 1 November 2004. Following this communication, existing customers of GMAC-RFC will receive an automatic re-crediting of the charges plus interest to their mortgage account.

For past customers who were in arrears and have already redeemed their mortgage with GMAC-RFC, the company will send a letter to the last known address to arrange a refund. Please contact GMAC-RFC at 0844 770 8030 if you believe you are affected by this matter and you have moved property.

Media Contact:

Sophie Lilley
Lansons Communications
020 7294 3657 or 07920 725 993