Mortgage Exit Fees successes and failures

colaop

I've just got a cheque back from Mortgage Express for £125.00, the full amount they charged me for MEAF.

I wrote to them asking for a full breakdown as I was aware that they were not allowed to overcharge me due to the recent FSA investigations. They replied by telling me that they were within their rights to charge me an administration fee. I then took a stronger approach by replying immediately, stating that I was aware that they were within their rights but had been advised that it should only be in the region of £50, so would they provide me with a full breakdown. If I did not receive a full breakdown within 14 days of then I would see legal advice. Within the week I had a cheque for the full amount of £125.00.

DON'T BE FOBBED OFF!

mayb_2

Some posters here have just phoned their past mortgage providers and asked for information on the fees at the time. It all depends whether the fee has gone up from when you took out the original mortgage with them and how much it has gone up by. If the fee was £75 and they charged you £125 you might get £50 back for instance - but if they quoted you £125 at the time you would not be entitled to a refund.

colaop

Hi

See my message, I got the full £125.00 back from Mortgage Express.

Good Luck

MarkyMarkD

mayb wrote: »

Thanks for the response MarkyMarkD but now I am more confused.

This is taken from the original template letter given on the main site by Martin.

"My contract with you stated a MEAF of [INSERT ORIGINAL MEAF], however, I was actually charged [INSERT ACTUAL MEAF]. I believe this unexpected increase does not reflect the true cost to [INSERT NAME OF BANK] of covering the staff and administration costs involved and I believe I have been unlawfully deprived of the money."

How can something be unlawful if it does not break a law of the land? Are you saying the letter is incorrect? It would mean non regulated meant able to break the law with impunity - surely that can't be right. Wasn't it only after this question of legality was raised that the FSA got involved?

I am happy to be £100 better off than I was before I contacted the company (providing I get the cheque) but I would still like to know what their fees actually were.

The legality of the situation is very interesting, if you are an anorak about this sort of thing (which I can be at times ).

The UTCCR (Unfair Terms in Consumer Contracts Regulations) are not intended to have any sway over the price businesses set for their products or services ("core terms"). So, if a lender says, up front, that the MEAF for their mortgage will be £x and then they charge £x at redemption, that's perfectly OK whatever £x is, because it was a core term agreed up front. It's irrelevant that the actual cost of providing the service was £y which is less than £x, in the same way that it's irrelevant to you whether a tin of beans that Tesco sell for 13p is 9p or 10p.

So, if you accept that an MEAF is a core term in the contract (and I think that honestly it's hard to deny this, particularly following mortgage regulation when the amount of the MEAF has been included in the KFI issued before the mortgage was taken out), there's no legal basis for challenging the level of MEAFs under the UTCCR.

But, the FSA also has responsibilities for ensuring that the institutions it regulates "Treat Customers Fairly" (TCF). Under this heading they can, loosely speaking, tell the businesses they regulate to operate in a particular way which they consider fair. IMHO it's on this basis that they've issued the guidelines relating to MEAFs, and this would explain why the guidelines only apply to businesses that the FSA regulate - because they aren't stating or clarifying the law, they are telling their regulatees how they expect them to behave.

So, in summary, I do think that the wording of Martin's template letter is a bit woolly and the legality bit is doubtful. It also gives far more detail than is required in most cases and that detail is often not available to people which makes them come on here asking unnecessary questions like "what was my fee in 1947" or "what did I get charged when I redeemed in 1972".

Martin's wording is very much like a "letter before action" and legal action isn't appropriate, or necessary, with regard to MEAFs as 99% of lenders are paying up the right amount immediately without any argument.

My own preferred template wording is very simply:

Following the FSA's statement of good practice in respect of Mortgage Exit Administration Fees (MEAFs), I am expecting you to refund me the difference between the MEAF I agreed when I took out my mortgage*and the MEAF you charged me when I redeemed my mortgage.

* Instead of "when I took out my mortgage" this should state the later of "when I switched mortgage" or "when I took my further advance" if either of those apply.

tee_pee_2

If I contact my old lender will they tell me what their fees were in 2003?

MarkyMarkD

You don't need to know what their fees were in 2003. You just need to ask them to refund whatever amount is due to you.

So, don't phone them up and say "what were your fees in 2003". Phone them up and ask them to refund you for over-charging you on their MEAF. If they didn't, they'll soon let you know.

rachelshopper

Hi
Has anyone successfully claimed from the Principality Building Soc?
Having successfully claimed for myself successfully from Northern Rock, Leeds & Mortgage Works - I did the same for my Mum who was with the Principality but they have come back saying that their charges are justified and refuse to provide a refund despite their exit fees nearly doubling over the term..
I am going to write to the Financial Ombudsman - but wondered if I could avoid this if anyone else has successfully claimed?
Your help would be appreciated!
Rx:

plzhelpmesave!

had an old mortgage on property sold 5 years ago, shredded all paperwork. wrote to lloyds using template letter, imcluded property address and approx dates. got cheque for 68 (£50 & £18 interest) in post today.

cheers martin xx

tee_pee_2

plzhelpmesave! wrote: »

had an old mortgage on property sold 5 years ago, shredded all paperwork. wrote to lloyds using template letter, imcluded property address and approx dates. got cheque for 68 (£50 & £18 interest) in post today.

cheers martin xx

I am in exactly the same situation I have no notes for two of the mort I have had. IN the template where it says about what you were charged and what you were actually charged, what did you write as I haven't got a clue what I agreed to or what I was charged at the end.

Thanks

Stymied_2

Many thanks Martin.

I saw a brief reference to this in the Money section of The Guardian, and found all the info I needed here on this site. I had the cheque from C & G virtually by return of post.