NEW Mortgage Exit Fees Discussion

dunstonh

Smithfarnan wrote: »

Mortgage exit fees, The unfair contract terms provisions in the ASIC Act are new and they will apply to mortgage exit fees alongside the unjust .... We have been in discussion with a number of research houses as well as their user groups.

Rubbish. A fee is not unfair because it is a fee.

greenmyra

Hi, I have been successful in receiving a cheque from a previous mortgage lender for the overcharging of exit fees. I am now looking to contact others. I have been told that GMAC don't exist any more, where can I get the information from? I have no paperwork.

Mort3

I have just paid off my mortgage with Santander (formerly Abbey National) and have been charged a Deeds Handling Fee of £225. I suspect that this fee is also known as the Mortgage Exit Fee but Santander are no longer calling it this for obvious reasons!

Therefore, can anyone advise me if I can claim all or part of this fee back? If so, on what grounds would I be able to do this as it is no longer a mortgage exit fee?

In the mortgage contract, it specifies a Mortgage Account Fee of the same sum. Also, I am not sure if this applied because the mortgage was paid off when I transferred over to the standard variable rate mortgage when the existing mortgage deal expired. Surely, the terms applicable would be those of the standard variable rate and not of those on previous mortgage contract?

Anyway, I am not sure how to construct my claim if indeed I have one. Any views would be fab, thanks.

kingstreet

If the fee was disclosed to you at the point of taking out the mortgage, or at the point you changed the mortgage product, it stands.

Only fees which were increased between inception and redemption can be questioned and that is limited to a refund of the difference.

ie £225 at inception - £225 at redemption - fine.

£95 at inception - £225 at redemption - lender obliged to return £130.

Reversion to standard rate is irrelevant. It's a fee for the discharge of the mortgage, not for a particular product.

Mort3

Thank you Kingstreet for your response.


I cannot be certain that the fees increased from the date of inception (2003) to the date of redemption (2012) because I no longer have the paper work from the original mortgage contract. I only kept the details from the current product. You say it is these increases that can be questioned.


According to Martin’s article, it appears that refunds have been granted in full (and not limited to the difference) from the examples that he has cited. Why grant a full refund if there is no issue with these fees?


With this in mind, I think I will make an inquiry as to why I was charged this amount and to ask for a breakdown of the costs involved in ‘deeds handling’ etc. You never know!

dunstonh

I cannot be certain that the fees increased from the date of inception (2003) to the date of redemption (2012) because I no longer have the paper work from the original mortgage contract. I only kept the details from the current product. You say it is these increases that can be questioned.

The FSA ruling was that the any increase in fee since the start date of the mortgage or later deal purchased should be refunded. The later deal is what many forget. i.e. if you borrowed in 2003 and bought a new deal in 2005 and another in 2010 then on redemption in 2012 it would be the fee in 2010 that matters. Not the one in 2003.

According to Martin’s article, it appears that refunds have been granted in full (and not limited to the difference) from the examples that he has cited. Why grant a full refund if there is no issue with these fees?

Some people have been successful in getting the whole fee refunded by using blackmail or because it is a taxpayer owned bank who doesnt mind spending taxpayer money.

Mort3

Hi Dunstonh,

According to MCOB, isn’t there a regulatory requirement not to impose excessive charges on mortgage contracts? It is this rule that I will be basing my inquiry on.

I am not against companies, banks or other financial institutions making a profit. That is what their purpose is. What I am against is being taken advantage of and ripped off.

dunstonh

According to MCOB, isn’t there a regulatory requirement not to impose excessive charges on mortgage contracts? It is this rule that I will be basing my inquiry on.

There is no rule that sets figures on any charges. Where the FSA has put it its guidelines that the charges should not be excessive, that typically means a lot more than you would be thinking.

I am not against companies, banks or other financial institutions making a profit. That is what their purpose is. What I am against is being taken advantage of and ripped off.

Which is fine. It is also why the FSA set the ruling that you should only pay what you agreed to pay.

robertadico

want some more detail about this post.........

Mort3

I have had a response from Santander regarding my inquiry about the Deeds Handling Fee. They have explained that the charge is to reflect the admin costs involved in maintaining the account throughout the duration of the mortgage as well as for the redemption. For example, sending out statements, advising of rate changes and dealing with payments etc.

I guess if you divide the charge by the number of years I have had the mortgage, it does not seem so bad. What caused me to question the charge was how they named it a ‘Deeds Handling Fee’. It seemed rather excessive just for this.

They also made the point about the charge being part of the mortgage conditions which would have been issued to me at the time the mortgage was taken out. There has been no increases. I think kingstreet made this point.

Anyway, I’m gonna leave it now. Thanks guys!