Mortgage Exit Fees successes and failures

Steve_xx

MarkyMarkD wrote: »

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.

My comments are just as relevant as yours are. Though because you do not concur with them it does not give you the authority to rubbish them.

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.

The government had no choice. They were bound to pledge taxpayers money to prop up the banks. Now, we're starting to pay the price of it. Yet those chief executives that presided over the near collapse of the financial system have waltzed off with enviable pensions. And those that remain will carry on more or less as before, with their obscene bonuses, it seems.

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.

Yes I fully understand about the lack of choice available. That doesn't mean we all have to be happy with the choice that was made.

MarkyMarkD

The number of financial institutions which were "bailed out" was actually very few. Out of around 200 mortgage lenders, all of which this thread is relevant to, the "bailed out" banks probably represent less than a dozen.

Perhaps keeping the thread "on topic" rather than dragging out general gripes about "bail outs" would be more helpful to other readers?

roberts08

I've never entered an on-line forum before so just stick with me if I ramble.

We'd never defaulted on our mortgage payments so I naively assumed this was what reclaiming fees was about. I then received a dodgy phone call from Lifestyle Claims today who quickly (too quickly for not having any information) advised I could claim back the fees I'd paid when remortgaging our house - the magic figure of £2,500 was mentioned. I've got no intention of having anything to do with them but it did get me thinking.

What I'm trying to find out before writing any letters is . . .

If we added the fees to the amount we were lending, can we still claim this back with interest?

Can I claim the 'Product Fee' and 'Product Transfer Fee' back or am I still misunderstanding the whole thing?

I've just spent the last hour reading as many postings on the subject as I could and realise I may be sounding dim, it just never occurred to me that we would be able to claim anything back.

:idea:When I think about it, we added fees when we first took the mortgage out in 1998, and have remortgaged about 4 time since and have certainly added the fees to the amount borrowed 3 times. We've been with the Skipton the whole time so I'm assuming that should make gaining information a little easiser.

Maybe I should just ring the Skipton and bravely ask to reclaim . . . . . . :undecided

dunstonh

I then received a dodgy phone call from Lifestyle Claims today who quickly (too quickly for not having any information) advised I could claim back the fees I'd paid when remortgaging our house - the magic figure of £2,500 was mentioned. I've got no intention of having anything to do with them but it did get me thinking.

Dodgy claims companies pull figures out of the hat. They try to entice with big figures so when they tell you their fee you are more willing to pay it. Its a legalised version of the spam email from the Nigerian Prince who wants to pay you to transfer money from Nigeria. However, you have to send him some money first.

If we added the fees to the amount we were lending, can we still claim this back with interest?

No. This is a valid charge for buying a product. Asking for your money back is a bit like going to Waitrose asking for your money back on last weeks shopping.

Can I claim the 'Product Fee' and 'Product Transfer Fee' back or am I still misunderstanding the whole thing?

No. These are retail charges and quite acceptable as above. You are buying a product each time you buy that deal. Just because you have a TV, doesnt mean you get another one free of charge every 3 years. If you want a new TV then you pay for it. Same with mortgage deals. If you want a new deal then you agree to the terms and pay for it.

Maybe I should just ring the Skipton and bravely ask to reclaim . . . . . .

Its an easy rejection for them.

The only charges that are considered bad are those where the lender has charged on redemption a higher amount than that which was agreed at the start of the mortgage or subsequent deal (whichever was latest). There is some potential to reclaim excessive or unwarranted arrears charges as well.

I'm afraid the claims company have given you the wrong idea. Don't worry though. Their lies are normal. One even cold called me and told me I (an IFA) could reclaim money on my insurances even though I arrange them myself!

MarkyMarkD

roberts08 wrote: »

When I think about it, we added fees when we first took the mortgage out in 1998, and have remortgaged about 4 time since and have certainly added the fees to the amount borrowed 3 times. We've been with the Skipton the whole time ...

If you've been with Skipton the whole time, you haven't remortgaged once, let alone 4 times.

You have switched product and paid a fee to do so.

Remortgaging means changing lender, on the same property, not changing deal with the same lender.

This thread is about exit fees, which are incurred when you redeem a mortgage (either to remortgage to another lender, or when you sell your house) not product fees which are never, under any circumstances, reclaimable because it's your choice whether to pay them or not.

magpiecottage

MarkyMarkD wrote: »

You have switched product and paid a fee to do so.

This thread is about exit fees, which are incurred when you redeem a mortgage (either to remortgage to another lender, or when you sell your house) not product fees which are never, under any circumstances, reclaimable because it's your choice whether to pay them or not.

The issue with exit penalties is that the borrower had no knowledge of the amount involved at outset.

You MAY be able to argue that you did not realise that if the initial fees were going to need to be paid in the end and that you would be paying interest in the meantime - but it is a bit like putting wearing a t-shirt proclaiming that you are thick!

MarkyMarkD

The issue with exit fees that are reclaimable is that the borrower had no knowledge of the amount involved at outset.

That's why if you were told at the outset it was going to be £250, and you get charged £250, you have no justifiable reason to claim.

Product fees are different because you are told what they are before you are committed, and can simply say "no".

Winning_Team_2

Thanks to all, for the response re the Abbey and A&L not paying dividends to customers when the Santander takeover occurred. Much obliged for taking the time to explain.

anaylorefc

Can someone give me some adivce please? I'm a little confused. When I switched over to Chelsea from Northern Rock I was charged a £250 exit charge (or something similarly named). I was not locked in with a deal so had not broken any agreement etc. Am I able to ask them for this back?

Thanks

dunstonh

When I switched over to Chelsea from Northern Rock I was charged a £250 exit charge (or something similarly named).

That seems quite normal.

. I was not locked in with a deal so had not broken any agreement etc.

That would explain why no early repayment charge was made.

Am I able to ask them for this back?

Can you complain about it and ask for it back? yes you can. You can complain about whatever you want to complain about. However, do you have a valid complaint? No. At least not for that reason.

The FSA ruling was that if the charge increased from when you took the mortgage out (or the last deal you bought, whichever later) then you are entitled to complain and ask for a refund of the difference. So, if the cost was £250 when you started the mortgage and you paid £250 then you only paid what you knew it was going to be. However, if it was £125 at the start and you paid £250, then you can complain and ask for the £125 difference back.