Mortgage Exit Fees successes and failures

mums_word

got in contact with my old mortgage lender a few weeks after watching the show and i am pleased to report that i got the full exit fee i paid returned ...really with no hastle...thats me £130 better off this month:D YEEHAA:T :j

missdrexie

Northern Rock wouldn't discuss figures with me over the phone and siad I had to send a letter, for the price of a stamp got a cheque back for £85! :T

Brilliant! :j

TerryBlue

I just read an article about the FSA's opinion on high exit fees - Very interesting reading, but quite long, so I've just pasted the highlights below:

"...A Statement of Good Practice, issued by the FSA, highlighted that consumers were being charged higher exit fees than they had expected.

The Statement aimed to stop existing customers being charged unexpected increases to MEAFs and to provide a basis on which past customers could seek compensation..."

"The FSA has analysed the responses of a sample of firms, comprising a significant proportion of the mortgage market, on the outcome of their reviews of how to treat future customers. This shows that:

• Most major lenders have opted either to charge a fee that cannot be varied during the lifetime of the mortgage, or to remove the MEAF altogether; and
• Other lenders will charge a MEAF which reflects the administrative costs when the customer exits the mortgage. The MEAF should only be varied for valid reasons clearly explained at the outset."

"...What we are seeing achieves our principal aim of stopping customers from being surprised by unexpected increases in these fees. Customers will know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be varied fairly..."

"...Key issues for consumers to consider are:

• If you think you have been charged a higher exit fee than the fee stated in your mortgage contract, contact the lender to find out if you are eligible for a refund of the difference. You may not need the original mortgage documentation to claim. If you give your name and the address of the property, the lender should be able to find your details.
• From now on, you should know when you sign up for a mortgage what exit fee you will pay, or should be given a clear idea of how the fee might be varied in the future. This transparency and fairness will allow you to make an informed decision about which mortgage product is best for you.
• Check all the mortgage fees as well as the interest rate when comparing mortgages. Consider what impact the fees will have on the overall cost of borrowing..."

Full article was at this Mortgage Information site.

Sounds to me like the FSA's on our side! - What do you think?

MarkyMarkD

I'm not sure what you think "on our side" means, Terry.

Welcome to the site, anyway.

The FSA certainly aren't saying that "high exit fees are bad" or even that "high exit fees are unacceptable". What they are actually saying is that "unexpected increases in exit fees are bad and unacceptable, except where the increase is for a valid reason and the amount related to that valid reason".

The FSA have handled this in quite a fair way, IMHO.

There's nothing inherently wrong in a mortgage which charges no interest at all, and then charges a £100,000 exit fee, as long as it's explained properly up-front. That might be very attractive to some customers, and the FSA aren't stopping any lender offering such a deal.

But they expressed their concern over lenders who signed people up, expecting to pay an exit fee of (say) nothing - e.g. Nationwide borrowers - who were then charged an exit fee of (say) £90 - when nothing had changed to warrant the new (or increased) fee.

savingforoz

Called Barclays/Woolwich today, will be getting a refund of £100 plus £13.57 accrued interest!!! Yay!!! :beer: Thanks, Martin. Very helpful lady on the phone, and it was quick and easy to do. A happy bunny here.:j

harley_883

i moved in nov 06,read your article yesterday(15 months later),today at 4pm i remembered to make the call,used the say no to 0870 website found a freephone number to call them on was transfered only once to the correct department,i didnt know what i had paid so i just asked for the refund the guy looked into it just had to give him my old address i had paid £225 should have been £85 so a £140 is on its way to me,took 5 mins i think
I could have asked him why i wasnt given back to me automatically but i didn't, could have asked about the posibility of 8% interest being added to the payment to but am just so happy how easy the refund was to get.
well done martin for you great web site i dont do much in life without first looking at your site, think i owe you a pint

Mutton_Geoff

Having trouble with Cheltenham & Gloucester. Settled my 4 year old interest only mortgage last month only to be charged £100. They are claiming that because the exit fee was shown on my mortgage statements then it is valid. I have all the original documents when I took out the loan 4 years ago and there is not one mention of their "admin charge".

After writing to them to ask them to highlight where in my loan agreement it ever mentioned an exit fee, they sent a standard reply with the FSA's statement saying the fee was "fair". I called them and asked them to simply show me where in the loan agreement or T&C handbook it mentions the fee, again, a standard reply letter saying charges are valid ignoring my specific question.

Third letter gone off to tell them I'm now going to the Ombudsman.

MarkyMarkD

For a loan pre-dating Mortgage Regulation, most lenders would have had wording in their mortgage conditions saying something vague like "you agree to pay their costs associated with the redemption of the mortgage", and then a separate fees leaflet would have listed the fees for specific redemption-related activities such as "deeds release" or "mortgage sealing" or similar.

I doubt very much that there was no mention at all of these fees - I believe that you are mistaken.

And simply not having a copy of the relevant fees leaflet isn't a reason not to pay either - you should have been sent one with your mortgage offer, and probably again on completion, and a copy should also have been sent to your solicitor with his copy of the offer. If he didn't pass it on, that's not the lender's fault.

Yanusha

I ended my mortgage with SL in 2003, and called last Friday to ask for my "discharge fee" (MEAF) of £150, doing just as advised ("the FSA say I may have been overcharged"). Result: the bank called today and are refunding my £150 in full. Keep at it, guys!:j

sweetestthing

After watching Martin's programme on MEAFS, I called A&L as I paid off my mortgage in 2004. I was fobbed off by the person I spoke to who said I was not entitled to a refund. I then dug out some paperwork which stated the Sealing Fee was 50 pounds (sorry pound sign not working) but however I was charged 195 pounds. I then called back and spoke to another customer service advisor who told me I had a good case but I would need to write in. Less than 2 weeks later I received a cheque for 145 pounds. I thought I would try my luck and wrote another letter asking for a refund for the loss of interest, I asked for 46 pounds and today I received a cheque for 54 pounds.
Thank you so much Martin for encouraging me to claim the refund and also for your money saving tips, some of which have proved to have been extremely useful.