NEW Mortgage Exit Fees Discussion

philr1

Hi, I am having trouble with Abbey plc who have been charging me £35.00letter fees and arrears mortgage fees when I was unemployed.

They sent this reply to my request to refund all fees and said:

We don't believe that our fees breach the Unfair Contract Terms in Consumer Contracts Regulations. The Regulations look at the fairness of contractual terms that (amongst other things) permit charges to be made and varied. Our mortgage conditions allow us to charge fees to cover the reasonably estimated costs associated with activities such as dealing with mortgage arrears cases or unpaid Direct Debits. We're also able (under the mortgage conditions) to vary fees to reflect any changes in the estimated costs incurred by us. We notify customers in advance about our charges, which id sent out with customers annual mortgage statements. We feel that this is in keeping with the Regulations.

We're not obliged to provide you with a full breakdown of all costs associated with each of the fees that you've had to pay; this information is confidential. What we will say is in considering the fees we charge, we've also assessed those fees applied by mortgage providers similar to ourselves to ensure that we are'nt out of line with the general charges made in the market.

We also have to tell you that the mortgage statements you receive every six months give details of the interest and fees applied to your mortgage account. If you require duplicate statements then a fee of £20 is required for each calender year or part thereof. We'll be pleased to provide duplicates on reciept of the appropriate fee.

If you remain unhappy with my reply the next two paragraphs explain what you need to do next to take the matter further.

Please be assured we've carried out a full investigation for you and I hope you feel we've offered a fair respnse to all of the issues you've raised. We'll keep you file open for the next 8 weeks and if I do'nt hear from you within that time we'll assume that everything is resolved and will close your file.

If you remain dissatisfied though, the leaflet you'll find with this letter explains your rights and how to take complaint further with Abbey. The leaflet also explains about your ultimate right to refer you complaint to the Financial Ombudsman Service.

End

Any advice on how I respond to this reply from Abbey. I am willing to file County Court Summons if I have a case??

All advice welcomed,

Philr1

Noz

philr1, I think you would be best posting that in the bank charges forum for advice on these. This thread is specifically for MEAFs.

more_debt_than_albania

hi there i recently remortgaged and was charged £7000.the company said that i was tied in for 3 years but after 12 months my payments went up another £220 per month which i could not afford thus the reason i re-mortgaged.they called this charge a early repayment charge plus an admin fee of £191.00.if i was tied in why did my payments go up after 12 months.all the other mortgages i have had with tie in deals the payments never went up in that deal so why did they go up after 12 months i dont understand.i was on a fixed rate for 12 months not 3 years there was no way i could afford the extra 220 per month so why did the mortgage broker i went with give me this mortgage knowing that i couls not afford the payments after 12 months.now im in so much financial trouble its stressing me out financial companies or even the fsa should not let these people con people like me its really getting to me can anyone help??????????????????????????????????:

mayb_2

more debt than albania - Wow that sound really strange. What exactly was the mortgage called, for instance was it a tracker mortgage. Some mortgages fix you in to one rate for the first year then it goes up a step in the second etc. Some have tie ins even after the end of a fixed rate period. I think you need to give a bit more information about what your paperwork says you bought so that you can get some advice on here - or perhaps someone can point you to a better thread to get advice on this, as it is not just about exit fees but penalty fees. Sounds to me like you need to have words with your broker as he should have explained it to you so that you knew what you were buying. He should have probably fixed your rate for longer than 12 months if he knew you could not afford an increase in your repayments.

Failing that it may be a mistake on behalf of your mortgage company - have you asked them why you were charged the £7000 penalty fee if you were not tied in beyond the 12 months. Your paperwork should back you up if this is the case.

smjs

Hi,
Can anyone tell me if what I have been offered below is a good deal or not. The letter is quoted "When a customer chooses to redeem their mortgage, several admin tasks need to take place and fees charged. The exit fee is one of these. We remain satisfied tgat this charge continues to be fair,appropriate and clearly communicated.
From Jan 2007, customers will now pay the discharge of mortgage fee that applied when their loan originally started, or their contract was ammended. As a result, I have arranged to refund the difference between the amount that we charged you and the fee that applied when the mortgage contracts were initiated.
FEE TO BE CHARGED FEE CHARGED REFUND DIFFERENCE
1st Mortgage £135 £165 £30
2nd Mortgage £175 £250 £75

Many thanks for any help
Total £105

MarkyMarkD

more_debt_than_albania wrote: »

hi there i recently remortgaged and was charged £7000.the company said that i was tied in for 3 years but after 12 months my payments went up another £220 per month which i could not afford thus the reason i re-mortgaged.they called this charge a early repayment charge plus an admin fee of £191.00.if i was tied in why did my payments go up after 12 months.all the other mortgages i have had with tie in deals the payments never went up in that deal so why did they go up after 12 months i dont understand.i was on a fixed rate for 12 months not 3 years there was no way i could afford the extra 220 per month so why did the mortgage broker i went with give me this mortgage knowing that i couls not afford the payments after 12 months.now im in so much financial trouble its stressing me out financial companies or even the fsa should not let these people con people like me its really getting to me can anyone help??????????????????????????????????:

The offer documentation would have made it clear that you were tied in for three years.

Around 10 years ago, low start type products were all the rage. These products had very cheap rates for a year or two followed by higher rates for maybe three or so more years; you were tied in for the full 5 years or so. They became unpopular for many years (except with "dodgy" i.e. adverse credit lenders who kept doing them). They are now having a resurgence, in the mainstream market, probably because house prices are making regular mortgages harder to afford for first time buyers.

There's nothing inherently wrong or unfair about them. They are a way of helping people with their cashflow in the first year or two after they move house.

But you have to understand what you are buying - and if you can't afford the payments in the tie-in period, you shouldn't be buying the mortgage up-front.

Key financial documentation (KFIs) for mortgages are now standardised across all mortgage lenders; they show for example:

12 payments @ £500 per month; followed by 24 payments @ £750 per month; followed by lots of payments @ £800 per month.

I can't really see how you didn't realise your payments would increase at the 12 month point, or that you were tied in for three years. Your solicitor should also have explained all of this to you before you signed to accept the mortgage.

Having said all that, why in the world would you pay £7,000 to get out of a mortgage which you were tied in to @ £220 per month more than you were previously paying (and which rate you were presumably happy with)? £220 x 24 is only around £5,000 which is a lot less than £7,000.

In summary, I don't believe that your early repayment charge is unfair or illegal. The fact that you didn't understand what you were buying is down to your financial adviser and your solicitor.

monopoly_money

I havent read all the thread, but just wanted to share what happened with us.. i have been switching everything from my phone supplier to paying off my mortgage, so everything is cheaper per month, there was only 12,000 to repay on our mortgage at a rate of 7.4% variable so we decided to take a personal loan at 6.9% fixed for the whole term (6 and a half years) so that was cheaper, and no arrangement fee (and no fees to pay for setting up a new mortgage with a lesser %... these seem to have a high arrangement fee.... so it didnt work out cheaper) i asked for the final statement which they said they would work it all out and i would have it by monday... it actually arrived on wednesday, with a letter to say they would charge x-amout% for each day it was not paid... :eek: already being annoyed with nat west for other things (our mortgage was with them too) i rang them up and told them i wasnt going to pay the x-amout% and that i couldnt get to the bank that day and i would go on the following day to pay it off, which i did. they didnt take the x-amout% but i had to get very annoyed with them for them not to take it! the amount they charged for a sealing fee was £225, which i paid, slightly disgruntled at this amount. then i got £140 paid back into our current account as a refund so i rang them, they told me immediately that the original amount agreed was £75 ... so why did they take the £225?? and 225-75 is not 140 its 150 so i went off my trolley at them, and i have asked for the extra £10 and compensation, :rotfl: i was so angry i said i either wanted £100 or to have the fee £75 waivered! (i have also been waiting for my deeds to arrive... 3 months !! and i had to ring to ask them to send them, was also told that they would be sent to me ordinary post :eek: i said they had better send them recorded delivery or else! :eek:
i am still waiting for my deeds and i havent heard anything yet as to if the fee will be waivered or compensation sent! will post when i have info!
Phil

mayb_2

Originally posted by MarkyMarkD
"The offer documentation would have made it clear that you were tied in for three years."

Is there a reason that you know this MarkyMarkD? It sounds as if moredebtthanalbania had changed the mortgage in the past so should have had some idea of what was going on. Something must have gone horribly wrong at the point of sale if this has come as such a shock - you can't easily confuse being told you were tied in for one year with being tied in for three years can you?

MarkyMarkD

mayb wrote: »

Originally posted by MarkyMarkD
"The offer documentation would have made it clear that you were tied in for three years."

Is there a reason that you know this MarkyMarkD? It sounds as if moredebtthanalbania had changed the mortgage in the past so should have had some idea of what was going on. Something must have gone horribly wrong at the point of sale if this has come as such a shock - you can't easily confuse being told you were tied in for one year with being tied in for three years can you?

More debt than Albania's mortgage is only just over a year old, so it is regulated. That means that it must have had a standard format KFI. The format is shown on the FSA's site here: http://www.fsa.gov.uk/pubs/other/mcob_forms/mcob5_annex1.pdf.

It includes both bits that I've mentioned:

- listing the monthly payments required throughout the life of the mortgage, which would make a leap in month 13 very obvious; and
- listing the early repayment charges, which would make a 3 year tie-in very obvious.

If a two page (or so) KFI is too difficult for More debt than Albania to understand, then it's their advisor & solicitors' responsibility to help them to understand it. But I don't really see how it would not have been obvious.

More debt than Albania, do you have the KFI for your mortgage and if not, did you ever have it?

kat1234_2

MARTIMAN wrote: »

My mortgage with the Abbey was from 2002 to 2005 Dec, & I received £130 from them.

Hi what letter did u send to abbey as my mortgage was round about the same time thanks