MIG fees

victoria14

hi all has anyone ever tried reclaiming MIG fees at all ? I paid £2000 mig fee due to a 90%LTV on my mortgage 4 years ago, about 2 months later the lender abbey stopped charging mig fees altogether I feel done and was wondering if there was any way of reclaiming it as it does seem like an unfairly high charge. ?

dunstonh

Its not unfair and its only expensive as you didnt save enough deposit.

There has been some talk of MIGs coming back again on high loan to valuation cases.

victoria14

Hi there,

I think you have misunderstood my point - I do know what a MIG fee is.

What Im trying to say is that under the principals of TCF how can they charge some people and not others (before you say it, I work for a brokerage and I do not have bad credit) what happened was that Abbey, since I took out my mortgage abolished MIG fees for the same equivilant deal that I had. In addition you say its not unfair I should have saved more deposit, well then under the same principal people who have been charged overdraft fees that they are trying to reclaim shouldnt have used their overdrarft ? what Im trying to say is that the charge is excessive for what it is, working in insurance Im positive that the cost of the MIGS in most cases is too high.

I dunno I was thinkiing it may be worth a letter but wanted to see if anyone else had tried it first ??

dunstonh

What Im trying to say is that under the principals of TCF how can they charge some people and not others

They only applied it to the low deposit borrowers. That is based on risk of lending. That is acceptable and not a breach of TCF. Its also a commercial decision and outside the remit of the FOS.

what happened was that Abbey, since I took out my mortgage abolished MIG fees for the same equivilant deal that I had.

That doesnt make the old fee unfair. Products change all the time. People who bought early Plasma TVs paid £5000. People buying better versions now pay £1500.

Life assurance goes up and down in price all the time. Terms change as well.

When you buy, you buy based on the terms being offered at that time.

In addition you say its not unfair I should have saved more deposit, well then under the same principal people who have been charged overdraft fees that they are trying to reclaim shouldnt have used their overdrarft ?

They had a choice whether to use the overdraft or not. You had a choice on whether to buy their mortgage or not.

what Im trying to say is that the charge is excessive for what it is, working in insurance Im positive that the cost of the MIGS in most cases is too high.

Dosen't matter if its excessive or not. There is no law telling them what they can or cannot charge. Its not a penalty charge and therefore does not need to be justified in that way. There is no law on what is reasonable.

I dunno I was thinkiing it may be worth a letter but wanted to see if anyone else had tried it first ??

You can write a letter about anything and you never know. complaints departments often pay out something just to get rid of the complaint as quickly as possible, even when there is no complaint to answer. I see no issue here for them to answer and there isnt a hint anywhere that MIGs are potentially reclaimable or wrong. As I said, there has been talk of them coming back again. They only went as the housing boom really made them unnecessary and the risks were not perceived to be the same. Now the risk has become noticeable again and we are unlikely to have another house price boom for a while, the case for MIGs to be charged has returned.

HughJarse_2

dunstonh wrote: »

Its not unfair and its only expensive as you didnt save enough deposit.

There has been some talk of MIGs coming back again on high loan to valuation cases.

I must have missunderstood UTCCR then....

S4. Unreasonable indemnity clauses

• A person dealing as a consumer can not be made to pay an unreasonable indemnity arising from liability incurred as a result of breach of contract or negligence. - Subject to the reasonableness test under s.11

dmg24

HughJarse wrote: »

I must have missunderstood UTCCR then....

S4. Unreasonable indemnity clauses

• A person dealing as a consumer can not be made to pay an unreasonable indemnity arising from liability incurred as a result of breach of contract or negligence. - Subject to the reasonableness test under s.11

Yes, you have. A MIG is not a penalty clause i.e. it is not charged as a result of a breach.

HughJarse_2

dmg24 wrote: »

Yes, you have. A MIG is not a penalty clause i.e. it is not charged as a result of a breach.

It is charged in the anticipation of a breach of contract, indemnifying the dominant party in the contract (Mortagor) against the minor party in the contract's (Mortgagee) possible breach.

The customer is afforded no protection from the MIG, this protection is afforded to the Mortgage provider. Yet the customer is forced to foot the bill.

Unfair.......pure and simple.....unless the dominant party in the contract wishes to prove otherwise.

roonaldo

HughJarse wrote: »

It is charged in the anticipation of a breach of contract, indemnifying the dominant party in the contract (Mortagor) against the minor party in the contract's (Mortgagee) possible breach.

The customer is afforded no protection from the MIG, this protection is afforded to the Mortgage provider. Yet the customer is forced to foot the bill.

Unfair.......pure and simple.....unless the dominant party in the contract wishes to prove otherwise.

The MIG is not a hidden fee, its declared upfront, it is not an unfair charge. It's also not reclaimable.

The lender has no obligation to offer a fee free mortgage.

Simply, if you dont want to pay the MIG, go elsewhere for the mortgage.

dunstonh

It is charged in the anticipation of a breach of contract, indemnifying the dominant party in the contract (Mortagor) against the minor party in the contract's (Mortgagee) possible breach.

Its effectively an insurance paid to protect the lender but paid by the borrower.

Unfair.......pure and simple.....unless the dominant party in the contract wishes to prove otherwise.

Fair unless you can get a court to agree otherwise. No-one managed that in decades of MIGs being charged.

jamesd

In its mortgage market review the FSA gave the default rates by LTV. Those at higher LTV were significantly more likely to default. That higher default rate has to be paid for somehow. Are you objecting to an explicit MIG charge and happy if it's charged for with a higher interest rate instead?

tifo

victoria14 wrote: »

hi all has anyone ever tried reclaiming MIG fees at all ? I paid £2000 mig fee due to a 90%LTV on my mortgage 4 years ago, about 2 months later the lender abbey stopped charging mig fees altogether I feel done and was wondering if there was any way of reclaiming it as it does seem like an unfairly high charge. ?

I didn't know Abbey charged MIG (Mortgage Indemnity Guarantee). I had a 90% LTV mortgage from the bank and I did not pay any MIG fee. I didn't pay any fees as they refunded my survey fee and the developer paid for the searches.

I know many sub prime lenders charged this.