Mortgage Indemnity Fees - Can we claim back?

stash36

I put my reclaim of mortgage discharge fee up on this board yesterday, and mentioned that I'd like my £800 indemnity fee back. A couple of people agreed with me so I'm posting this again in its own thread to see what people's views are.



stash36
Halifax.

Fee was £40 in '95, and £75 when I left them in '01. Phoned up and cheque for £35 in post.
A collegue went into his Halifax branch and left with a similar cheque within 15 mins.

Now if could get my £800 mortgage indemnity fee back, I'd be even more pleased. Surely that's also got to be found unlawful some time soon.

Grabbit
Now that is an even better (and more lucrative) idea than reclaiming exit fees. If my memory serves me correctly the indemnity fee was an insurance fee that the mortgage company charged you so if you defaulted they could claim against it. The mortgagee never received a service for it, were never told what it entailed, and never signed a contract for it - BUT THEY CHARGED YOU IT ANYWAY.
And if you didn't have one they wouldn't give you a mortgage.

So if bank and mortgage charges are meant to reflect the true cost of the service provided then what was the true cost of an indemnity that one was charged something like £1000 for ?

stash36
Exactly Grabbit. We struggled to get a mortgage back in '95 and had to pay the 800 idemnity fee with the Halifax or we were snookered. I remember it being termed as funds they invested in case they had to sell the house on at a loss in future. In they end they didn't need to do this as I changed lenders, paying them off in full, so where's my 800 quid?


So, has anyone ever looked into this before?
I'm going to write to the bank and ask them their views, and why I've never had part of the fee returned.

toonfish

it's an insurance policy to protect the lender because you were considered a high risk - I don't like them but why on earth should it get refunded?

What about the vegetables I never got around to eating - should I get a refund from Sainsburys for those?

arkie

Mortgage Indemnity= is a type of insurance policy the lender buys out of the Mortgage indemnity Fee you have been charged. The policy covers the lender (not you) should they have to repo your house. If the house then sells at a loss the lender claims on that policy. The insurance company then persue you for the amunt of the shortfall.
So in other words ... NO you cant claim

well said Toonfish

stash36

toonfish wrote:

why on earth should it get refunded?

Because the policy was to cover 25 years, but was no longer required after 5 years.

LisaT186

A Mortgage indemnity fee is used by the lender to buy an insurance. If they don't claim off it there is no refund. You wouldn't expect to get a refund of car or home insurance if you didn't claim. You pay the premium as you are asking the lender to take a risk with lending to you at a high Loan to Value.

All that can be done is to shop around for lenders that don't charge or factor it in to your comparisons when deciding on the best deal.

danjberry

why not ask your lender if you can claim back the amount of interest you paid them on your mortgage

dwsjarcmcd

If you didn't want to pay the fee you should have either looked for a product that didn't charge it (in essence they all do for higher LTV cases, they are just priced into the cost of the loan), save up for longer until you didn't need to pay for them or not buy the house.

dunstonh

Because the policy was to cover 25 years, but was no longer required after 5 years.

But it could have been and still could be. That is what insurance is about.

I really find it absurd at the things that people are trying to claim for at present.

toonfish

danjberry wrote:

why not ask your lender if you can claim back the amount of interest you paid them on your mortgage

nice one - I'm going to try that!

stash36

Thanks for the sarcastic comments from the advisers.
I don't think it's a fair charge and, nothing ventured, nothing gained.
I'll let you kow how I get on.

danjberry

stash36 wrote:

Thanks for the sarcastic comments from the advisers.
I don't think it's a fair charge and, nothing ventured, nothing gained.
I'll let you kow how I get on.

why is it not a fair charge? they have had to pay out for it in the first place so why should they be out of pocket by refunding it?