Mortgage Exit Fees successes and failures

Steve_xx

My friend received a letter from A&L today. They had charged him £295 to exit his mortgage and they have refused to refund any of the charge, saying that he changed product in 2004 and that as he had done so he would have received a notification of the new exit fee.

Is it worth his while pursuing it on the grounds that the fee is excessive for the work undertaken?

flynnhelen

I am in shock! I have just received a cheque for the full £295 exit fee we paid last year from Alliance and Leicester. The first letter I sent got me nowhere as they said it was in the contract so tough luck. I sent another (harsher) letter that stated that it was probably in the contract hidden away in the small print but was still not a FAIR charge but a fine for terminating a contract early which is illegal. I said that unless they could send a full breakdown of every single cost involved I would take them to the small claims court and never bank with them again. A week later I got a cheque for the full amount!

Yorkshire bank also refunded over £100 with one letter a few months ago!

Thanks Martin. We are well chuffed.

pinknico

ONE PHONE CALL THIS MORNING AND I WILL BE RECEIVING £180 PLUS INTEREST OF £13.29. £193.29 WHICH i WOULDN'T HAVE HAD A CLUE ABOUT WITHOUT THIS SITE MANY THANKS.:T

Steve_xx

Following on from my post number #2576

My friend wrote back to Alliance & Leicester asking for a full breakdown of the £295 exit charge levied. A&L were told that if the costs seemed excessive that a County Court writ would follow.

Today, a cheque for the full amount of £295 has been recieved from A&L.

ksw1907

Wrote to Bristol and West last 5.8.08. Had a reply by Saturday offering £50 (which is the difference) but no interest. I am happy with this so decided to accept. Not bad for one letter.

stokesy01

Got £35 back from a £75 charge made to redeem mortgage Dec 2003. Was told on the phone would probably not get anything for that one so that's a bonus. However was also told that would get £100 back for next mortgage with them which redeemed in Feb 2007 (they charged me £175). They have written to say that was the fee quoted in the documents (which it was) and that the FSA have said it is a reasonable charge. Oh yeah? What for some pen pusher to shuffle a few pieces of paper and cost of a first class stamp. Don't think so. Will be complaining again as dude on the phoen said would deffo get £100 back. they need to accept responsibility for what their staff are saying otherwise will take it to FSA. Also will be asking for breakdown of costs. how can fee escalate from £40 to £175 in 3 years? Defies belief.

MarkyMarkD

It does not matter whether the charge is reasonable. You agreed to it in the contract.

You can't complain to Tesco that your tin of beans cost 30p and it only cost them 10p to buy it. The profit element of the 30p is irrelevant.

If they have said "the FSA has said it's a reasonable charge" that's rubbish. The FSA's ruling actually said that lenders could charge any amount they like as long as it's set out up front, and doesn't increase unreasonably.

Steve_xx

MarkyMarkD wrote: »

It does not matter whether the charge is reasonable. You agreed to it in the contract.

You can't complain to Tesco that your tin of beans cost 30p and it only cost them 10p to buy it. The profit element of the 30p is irrelevant.

If they have said "the FSA has said it's a reasonable charge" that's rubbish. The FSA's ruling actually said that lenders could charge any amount they like as long as it's set out up front, and doesn't increase unreasonably.

If I go to Tesco and buy a tin of beans it shows the price clearly and if I don't like it I can go to ASDA or elsewhere. If I go to the trouble of setting up a mortgage I really don't expect to be ripped off to the tune of the equivalent on average of one months payments in order to settle it. If I go for a mortgage it is often shrouded in small print and this small print contains penalties for actually paying off what I borrowed. A bizarre situation whereby I elect to pay someone what I owe them and they charge me for doing so.

Maybe I did agree to it, but then in not doing so I couldn't have the mortgage. In other words it's not open for debate, ie the terms are imposed and I think that such terms are 'unreasonable'. The banks also feel that their terms would not stand the test of 'reasonableness', hence they are prepared to refund their hapless customers.

dunstonh

If I go to Tesco and buy a tin of beans it shows the price clearly and if I don't like it I can go to ASDA or elsewhere. If I go to the trouble of setting up a mortgage I really don't expect to be ripped off to the tune of the equivalent on average of one months payments in order to settle it.

Its a good job the lenders published these figures clearly in their charges guide. They also appear in the Key facts illustration (for mortgages arranged in the last few years) and usually appear on the contract offer letter.

The charges booklet may be ignored by consumers but the KFI shows it clearly as does the offer letter.

So, you knew what the charges were when you bought the mortgage but you still chose to buy. The FSA ruling has ensured the companies stick to those charges which is fair and common sense.

Maybe I did agree to it, but then in not doing so I couldn't have the mortgage.

No maybe about it. You did. You could have gone to a different lender if you didnt like it.

In other words it's not open for debate, ie the terms are imposed and I think that such terms are 'unreasonable'.

Doesnt matter what you think. The charge is a reasonable charge for the admin and admin charges dont have the same requirements as penalty charges.

The banks also feel that their terms would not stand the test of 'reasonableness', hence they are prepared to refund their hapless customers.

They were told by the FSA what they had to do as the FSA felt the banks were increasing them too much. The FSA has the ability to decide if charges are fair or not on any regualted financial services company.

stokesy01

What's with you guys? Why stick up for banks? Steve_xx is right. Most mortgage lenders charge out of proportion fees so what is the point of shopping around? In any case, you are going to choose a mortgage based on the interest rate and the package such as a fixed or a tracker. I think it is right to challenge banks. They have held people in their grip too long. Why do you think they are refunding bank charges? because they are unfair - they are a penalty and do not reflect their costs.

I thought people were on the same side on this website. It would seem not.