Mortgage Exit Fees successes and failures

Fee_Claimer

dunstonh wrote: »

Its not a new trick. Its an individual error and you have taken the correct response by complaining about it as they havent resolved it.

MarkyMarkD wrote: »

An MEAF is payable for redeeming a mortgage, which you have done when you sold your house and bought another one.

Portability refers to transferring the product terms to a new property. It does not mean that you haven't redeemed the mortgage, or that an MEAF is not due.

It does, however, mean that the same terms should apply to the new mortgage - including the MEAF - which may be advantageous if it was lower than currently charged. In practice, though, most products which are portable would be fairly recent and have the highest (current) level of MEAF in any case.

In summary, you haven't got anything to complain about and, unusually, I disagree with dunstonh.

Thanks for your answers dunstonh and MarkyMarkD. I am not surprised now that Woolwich don't know themselves (my mortgage adviser and various others were completely unaware of this charge!) if two experts also disagree!

MarkyMarkD - what about my point that I was never told about this in the context of moving house? And what could possibly be the meaning of the phrase in the terms and conditions that says 'You can keep this mortgage if you move to another property provided that you still meet our lending criteria at that time'. When is that ever true if moving house means redeeming the mortgage? Plus, they say the charge is for dealing with administration around closing the account (apart from losing my payment it seems!) but I also paid a £35 charge for that.

I feel I have a very strong case given all their mistakes!

Chriswil

I wrote to Northern Rock asking for the £75 difference between the £175 MEAF when we took the mortgage out in 2003 and the £250 we were charged when we switched in 2006. I also asked for the 8% interest as per the template letter.

Northern Rock wrote back and have offered the full £250 back plus interest which equals £331.xx (can't remember actual figure!)

:jI'm delighted - thanks Martin!!

MarkyMarkD

Fee_Claimer wrote: »

Thanks for your answers dunstonh and MarkyMarkD. I am not surprised now that Woolwich don't know themselves (my mortgage adviser and various others were completely unaware of this charge!) if two experts also disagree!

MarkyMarkD - what about my point that I was never told about this in the context of moving house? And what could possibly be the meaning of the phrase in the terms and conditions that says 'You can keep this mortgage if you move to another property provided that you still meet our lending criteria at that time'. When is that ever true if moving house means redeeming the mortgage? Plus, they say the charge is for dealing with administration around closing the account (apart from losing my payment it seems!) but I also paid a £35 charge for that.

I feel I have a very strong case given all their mistakes!

Funnily enough I also have a Woolwich mortgage and I have my mortgage KFI.

It says "final repayment charge (payable on final repayment of the mortgage and non-refundable) £275". It also says "you can keep this mortgage if you move to another property provided that you still meet our lending criteria at that time. The mortgage terms and conditions will apply. For full details of the conditions please see the product literature."

Now, I can see what you are arguing. But legally, a mortgage is a loan on one property and cannot be transferred to another. So their wording "you can keep this mortgage" cannot mean what you interpret it to mean, and actually means what I say it means - that you can transfer your terms and conditions and basically take out an identical mortgage on a new property.

We also ported out mortgage from our old property to our new one. And we paid the £275 final repayment charge at the time.

The £35 fee you refer to is a completion fee. It is nothing to do with redemption and relates to your new mortgage, not your old one.

Fee_Claimer

MarkyMarkD wrote: »

Funnily enough I also have a Woolwich mortgage and I have my mortgage KFI.

It says "final repayment charge (payable on final repayment of the mortgage and non-refundable) £275". It also says "you can keep this mortgage if you move to another property provided that you still meet our lending criteria at that time. The mortgage terms and conditions will apply. For full details of the conditions please see the product literature."

Now, I can see what you are arguing. But legally, a mortgage is a loan on one property and cannot be transferred to another. So their wording "you can keep this mortgage" cannot mean what you interpret it to mean, and actually means what I say it means - that you can transfer your terms and conditions and basically take out an identical mortgage on a new property.

We also ported out mortgage from our old property to our new one. And we paid the £275 final repayment charge at the time.

The £35 fee you refer to is a completion fee. It is nothing to do with redemption and relates to your new mortgage, not your old one.

I guess that's why, when I first queried with my Woolwich adviser why it was coming up on statements, she said 'it is not a fee payable now or up front', and various people on phone helpdesks told me it was like the early repayment charge - it's stated but then not applied.

The whole principle of bank charges is that they should be clear and explained up front... and preferably they should be commensurate with the costs actually incurred by the bank. Woolwich haven't managed any of these principles in this case, and just made it worse by not answering my complaint for over 8 weeks, during which time they also lost £950 of my money.

MarkyMarkD

There's no principle that bank charges should be "commensurate with the costs actually incurred by the bank". Banks are allowed to make profits, just like supermarkets or any other business.

I agree that fees should be clear and explained up front, but that doesn't mean that there cannot be a profit - or a contribution towards profits at least.

Steve_xx

MarkyMarkD wrote: »

Banks are allowed to make profits, just like supermarkets or any other business.

.....and when they get into difficulty, unlike supermarkets or any other business, the banks can rely on the taxpayer to bail them out and to keep them in the style that they've become so accustomed to.

dunstonh

Steve_xx wrote: »

.....and when they get into difficulty, unlike supermarkets or any other business, the banks can rely on the taxpayer to bail them out and to keep them in the style that they've become so accustomed to.

The taxpayer has bailed out or funded plenty of other types of business over the years. The banks probably have the most in number if you go back over 300 years.

The problem is more the system than the banks themselves.

MarkyMarkD

The last two banks mentioned in this thread are Woolwich (a division of Barclays, which has received no "bail out" money) and Northern Rock (which received no bail out money and whose shareholders lost all their investment).

So, Steve_xx, your comments are irrelevant.

The government had the choice of injecting capital into the large banks - which is not a "gift" or a "bail out", but an investment which will yield the taxpayer a return when the shares are sold - or a meltdown of the financial system. Not least this would have meant the complete collapse of the FSCS because it would have had to pay out the retail balances of many, many, billions of pounds.

It might not have been a great choice to make, but there was no better choice. The idea that the banks should have just been allowed to collapse ignores the wider consequences of such a decision.

anniebea

I have a mortgage with Alliance & Leicester- it should be paid off in November 2011. The mortgage was taken out in 2000.

My current statment has a Redemption Administration Charge of £295.

Can I challenge this figure, ( sorry Im a bit confused as to whether challenging this payment only applies if a mortgage is closed when remortgaging with another provider).

If I can challenge the amount, should I do it now before it is paid off?.

Thanks

dunstonh

Can I challenge this figure, ( sorry Im a bit confused as to whether challenging this payment only applies if a mortgage is closed when remortgaging with another provider).

If the figure on your last mortgage deal showed an amount that was lower than £295 then yes you should challenge it. If it shows £295 then you are only being charged what you agreed.

The FSA ruling is that the charge should be the same as the one agreed when the mortgage was taken out or if you bought a new deal, whichever is the later.

in your case they should use the 2000 figure unless you bought a new deal after that point (like changing fixed rate).

If I can challenge the amount, should I do it now before it is paid off?.

If you havent been charged an amount yet then you cant challenge it.