Mortgage Exit Fees successes and failures

Ruth

As I took great pleasure in doing in respect of a customer complaint today.

Usual claptrap complaint wording. Usual response - no, you are not getting a refund. :beer:

MarkyMarkD

Steve_xx wrote:

MarkyMarkD wrote:

The reason that you have to ask for a refund is that the lender does not necessarily know where you live. A large proportion of people redeeming mortgages have moved house and they don't tell their old lender their forwarding address. The FSA agreed with the lenders that it was impractical to send out refunds to unverified and probably incorrect addresses. That is why reclaiming is required.

They'd be happy enough to try and find out where you had moved to if you left them with several months unpaid mortgage I guess.

Also, it is reasonable to assume that not everyone left their bank and so why were customers who stayed loyal not contacted by their bank and offered refunds?

If they were interested in refunding their ex-mortgagees they could make use of the media to do this, ie TV, newspapers. But they didn't, and the reason that they didn't was simply so that they could hang on to the cash.

The FSA agreed they didn't need to contact customers to refund it. Crying about it now won't change that. Suggesting that banks should waste lots of money tracing customers who might have been overcharged a few quid is ridiculous. Obviously banks spend money tracing customers who defaulted on their mortgages and owe them thousands - why on earth would they not?

Steve_xx wrote:

MarkyMarkD wrote:

As Dunstonh says, they only charged the "wrong" amount before the ruling was issued. Nobody after the date of the ruling should be overcharged. That is why claiming NOW is wrong - everyone is paying the right amount.

Some who are claiming now are doing so because they were either overcharged or were levied a charge that ought not to have been there at all.

Your similes with cinema tickets do not wash at all. The KFI is required to show the exit fee. It is a clear term of the contract. It is completely stupid and fatuous to claim that a mortgage with a £500 up-front fee and a £250 MEAF is unfair, but an otherwise identical mortgage with a £750 up-front fee and a £0 MEAF is completely fine. The first is actually BETTER for the customer because the MEAF is only payable when they redeem. But you would somehow suggest the customer should choose it on the basis that it's a better overall deal, and then pretend 5 years down the line that the fee is excessive and "claim" it back? Get real.

The point is that the public in general do not accept the fee as valid. They don't understand what it's for and they feel that they cannot get out of their mortgage without paying it.

Rubbish. Certain members of the public think they can get some money for nothing, which they are not entitled to. Nobody asks Tesco how much of the cost of a tin of beans is profit. It is not relevant. Neither is the amount of an MEAF which is profit relevant. You agree to the price of the beans before you check out of the supermarket; you agree to the MEAF before you accept the mortgage offer.

Steve_xx wrote:

MarkyMarkD wrote:

That is exactly the situation that A&L - for example - were in. Their deals were the best on a true cost basis - even though the MEAF was the highest in the industry at £295. For anyone who chose an A&L deal, when the MEAF was stated up-front as £295, they got a good deal overall. And they didn't have to pay £295 until they redeemed. Win win.

Some A&L customers were charged £295 when they had agreed a lesser amount.

As you well know, it is not those customers that I am talking about, but those who AGREED to pay £295 and who you are now supporting in blackmailing A&L to return that, correctly charged, £295.

Steve_xx wrote:

MarkyMarkD wrote:

And I'm a Santander shareholder and it annoys me that (a) people are still scamming A&L and thereby stealing money from me and other Santander shareholders; and (b) people are still trying to pretend that scamming in this way is somehow OK.

Look on the bright side, not everyone is claiming back what they are due to. So Santander will get to keep an amount that will probably offset the amount they have had to pay out.

Two wrongs do not make a right.

Steve_xx

MarkyMarkD wrote: »

The FSA agreed they didn't need to contact customers to refund it. Crying about it now won't change that. Suggesting that banks should waste lots of money tracing customers who might have been overcharged a few quid is ridiculous. Obviously banks spend money tracing customers who defaulted on their mortgages and owe them thousands - why on earth would they not?

Rubbish. Certain members of the public think they can get some money for nothing, which they are not entitled to. Nobody asks Tesco how much of the cost of a tin of beans is profit. It is not relevant. Neither is the amount of an MEAF which is profit relevant. You agree to the price of the beans before you check out of the supermarket; you agree to the MEAF before you accept the mortgage offer.

As you well know, it is not those customers that I am talking about, but those who AGREED to pay £295 and who you are now supporting in blackmailing A&L to return that, correctly charged, £295.

Two wrongs do not make a right.

Nothing new there then.

dunstonh

As I took great pleasure in doing in respect of a customer complaint today.

Usual claptrap complaint wording. Usual response - no, you are not getting a refund. :beer:

Good for you Ruth. Its a shame that too many are willing to roll over due to workload or to make sure their complaints count which is upheld is within their quota that is expected of them.

This happened in the past with other areas of small amounts. They providers gave in but then put their foot down which cost them more initially but then it tailed off once people realised they couldnt get away with it.

I am all for firms paying out when they are wrong but when they are not, its just a waste of money that other people have to pay.

lindamarie

Hi
Very interested about these exit fees, can anyone tell me please has anyone tried to claim fees back from mortgage lenders who generally deal with people who have had problems & weren't able to apply to the like of NatWest, Barclays etc.
To be more specific mortgage companies like I. Group ( now G.E. Money Servicing Ltd), Kensington, SPML etc, where their interest fees for the mortgages were well about the Barclays bank rate anyway. We paid them off way back in 2003 and had 3 mortgages with I. Group for various properties etc over a number of years, (they always came with high redemption and exit fees anyway.)
It would be great if we could claim back some of these fees as they were very high. Any help would be appreciated.
Linda Marie

_Andy_

lindamarie wrote: »

Hi
Very interested about these exit fees, can anyone tell me please has anyone tried to claim fees back from mortgage lenders who generally deal with people who have had problems & weren't able to apply to the like of NatWest, Barclays etc.
To be more specific mortgage companies like I. Group ( now G.E. Money Servicing Ltd), Kensington, SPML etc, where their interest fees for the mortgages were well about the Barclays bank rate anyway. We paid them off way back in 2003 and had 3 mortgages with I. Group for various properties etc over a number of years, (they always came with high redemption and exit fees anyway.)
It would be great if we could claim back some of these fees as they were very high. Any help would be appreciated.
Linda Marie

There is nothing to claim back unless they charged you more than what was on your mortgage offer.
If you felt the charges were 'very high' why did you accept the mortgage with them?

Steve_xx

_Andy_ wrote: »

If you felt the charges were 'very high' why did you accept the mortgage with them?

Maybe they accepted because they had no other opition available to them. Commonly referred to as Hobson's Choice.

lindamarie

Steve_xx wrote: »

Maybe they accepted because they had no other opition available to them. Commonly referred to as Hobson's Choice.

Exactly right, we had no other choice, due to circumstances at the time and Hobson Choice is quite right ! People do whatever they feel is the only option open to them, as this was the case for us, and certainly not through choice.It gave us the opportunity to own our home.
I guess I will check with our old lender tomorrow it may be worth a phone call, or maybe someone out there has had the same problem and can help with an answer.
Linda Marie

Steve_xx

lindamarie wrote: »

Exactly right, we had no other choice, due to circumstances at the time and Hobson Choice is quite right ! People do whatever they feel is the only option open to them, as this was the case for us, and certainly not through choice.It gave us the opportunity to own our home.
I guess I will check with our old lender tomorrow it may be worth a phone call, or maybe someone out there has had the same problem and can help with an answer.
Linda Marie

It seems that a lot of people on here have had similar situations to yourself. The majority feel that these MEAF's are unfair, unreasonable and largely unavoidable.

Many on here have had such terms imposed on them and they have successfully reclaimed those charges. The usual process seems to be to write to your provider and explain that you feel that their MEAF charges were unfair and ask them to refund you. At this point some providers will say no, some will make an offer and some will refund the lot. If the provider says no, you would then normally write back and ask them to justify the level of their charge, perhaps using the benchmark of £50 as being a reasonable charge. At this point the provider will normally make an offer or refund the lot.

The bone of contention often centres around the provider requiring a fee for their administration charges in ending your mortgage. What annoys people is the fact that some providers may charge £50 for this, whereas others levy around £300 for the same work. This begs the question that if the fee is related to the work involved in winding up the mortgage, then why is it markedly different between institutions.

MarkyMarkD

It would beg that question, if:

(a) the fee was indeed related solely to the work of winding up the mortgage; and
(b) we lived in a strange world that required financial institutions to make no profit.

As (b) does not apply in the slightest, (a) is somewhat academic. But to address it in any case, the fee is not normally described as exactly matching the costs of winding up the mortgage.

Regarding "what annoys people is the fact that some providers may charge £50 whilst others charge £300" - people who use that argument miss the point totally. It might annoy you that one mortgage has an arrangement fee of £100 and another has an arrangement fee of £3,000. But that annoyance is nonsense - you can choose whichever you like to choose. The MEAF situation is no different - you can choose a mortgage with a £0 MEAF, or with a £295 one. Each is equally fair as long as the fee charged at the end is the fee agreed at the outset.

That is what the FSA ruled. Not that fees should be capped at some arbitrary level; not that they should be linked to the costs of redemption to the lender, but that they should not be increased from the amount at the outset, without the increase being justifiable.

Frankly, I don't care if "the majority feel that MEAFs are unfair, unreasonable and largely unavoidable". The majority (or a significant minority) on MSE are wrong about many things. MEAFs are unavoidable - they are part of the mortgage deal signed up to. That doesn't make them wrong. But nor are they unfair or unreasonable unless you have a very warped idea of what unfair or unreasonable means.

The very clear distinction against bank charges on overdrafts, is that EVERYONE knows that they will incur an MEAF, and the amount is set out in the KFI at the start of the mortgage in clear terms consistently across all mortgages. And it is these amounts - post mortgage regulation - which are in the main the ones which people are moaning on about, with steve_xx's support.

I'll ask Steve_xx to answer this - although I have done before, and he can't answer it:

What is unfair about a mortgage with an application fee of £0 and an MEAF of £295, but fair about a mortgage with exactly the same interest rate, an application fee of £295 and an MEAF of £0? Because his warped logic says that the second is fair, and the first is not.

Total and utter balderdash.

Both are equally fair and simply different ways of charging the same amount.