Early repayment charge: Legalities of not discharging the charge

mk_ll

Hello,

A mortgage company wants to charge me £140 as an 'exit fee', part of the initial contract on my mortgage. I have asked them to justify the fee and they can not; in particular, I asked them for the tasks that need to be performed and the cost associated with each task.

If I repay my mortgage minus the fee, is there any court action that can be taken to force them to discharge their claim on my property? If the debt has been repaid, the "administration fee" would appear to be an issue between myself and them and the fee was not part of the mortgage, which will have been repaid.

I see people have had various levels of success in getting money back post remortgage, but if a court order is achievable then it sounds like a powerful weapon in the war against unreasonable charges.


mkll

TrickyDicky101

It's not unreasonable if it was in the original contract that you agreed to surely? Nobody forced you to agree so if you were this dead set against the charge, why take out the mortgage in the first place? In my opinion, you should have objected at the time the mortgage was taken out, not now however many years down the line.

dunstonh

I have asked them to justify the fee and they can not; in particular, I asked them for the tasks that need to be performed and the cost associated with each task.

They have no legal requirement to justify it.

If I repay my mortgage minus the fee, is there any court action that can be taken to force them to discharge their claim on my property? If the debt has been repaid, the "administration fee" would appear to be an issue between myself and them and the fee was not part of the mortgage, which will have been repaid.

No. They can keep the charge on the property, charge you interest and ultimately put you in default and destroy your ability to get credit.

I see people have had various levels of success in getting money back post remortgage, but if a court order is achievable then it sounds like a powerful weapon in the war against unreasonable charges.

If its unreasonable then why did you agree to it in the first place?

The FSA ruling on exit charges was clear. The courts will side with the lender if its in the contract (which most are). You are on a hiding for nothing if you pursue this via the courts.

You may also wish to amend your thread title as the charge in question is not an early repayment charge (ERC).

Thrugelmir

mk_ll wrote: »

If the debt has been repaid, the "administration fee" would appear to be an issue between myself and them and the fee was not part of the mortgage, which will have been repaid.

The administration fee is part of the contractual arrangement. So the mortgage, the legal charge on your property would remain in place. The result being you could not sell the property until this charge is discharged.

Rather than waste hundreds of pounds on court fees and legal advice. Cheaper option would be to settle up now.

Next time read the documents fully before signing a contract.

dimbo61

Please pay the £140 exit fee and get on with your life I and many hundreds of thousands of other people would love to be mortgage free so just be pleased that you have no mortgage.
If you have the original mortgage paperwork check that is was £140 exit fee you needed to pay some lenders have overcharged

hillcats

Ask them to confirm what the exit fee amount was originally when you took out the mortgage,
that could be your starting block of the dispute if they have raised the original figure from that
on the original mortgage form you signed. I managed to reclaim quite a few hundred from three
mortgage providers when I asked them to justify their charges etc, then I got refunded.

It took quite a few letters and months though, and it was over a few years ago also.

_Andy_

hillcats wrote: »

Ask them to confirm what the exit fee amount was originally when you took out the mortgage

OP has already stated it was part of the original contract.

mk_ll

It turns out that the fee is not present in the mortgage offer, key facts or tariff of charges. The mortgage company has gone through a complaints process, concluded I should pay, told me it was in the documentation, but hadn't checked.

zppp

mk_ll wrote: »

It turns out that the fee is not present in the mortgage offer, key facts or tariff of charges. The mortgage company has gone through a complaints process, concluded I should pay, told me it was in the documentation, but hadn't checked.

Have you gone to FOS?