NEW Mortgage Exit Fees Discussion

MarkyMarkD

No, because that was an ERC (early repayment charge) not a MEAF (mortgage exit admin fee). ERCs are completely legitimate and not subject to the FSA's ruling or this thread.

Why, oh why, did you remortgage when you must have been on a good rate with C&G if it was fixed in May 2005? I cannot see an earthly reason why this was a good financial move.

shirleydevine

I have been charged £195 when I moved mortgage last year from the Clydesdale Bank. This is under the banner of "security release fee". It does state in my mortgage details when I took this out about 8 years ago that "fees are available on request". Am I still eligible?

jamanda

Thank you all.
I have just received a letter from LLoyds/TSB confirming they are repaying around £185 from when I paid my mortgage off last year.

I only sent them a pleasant letter asking them to look into it and quoted my mortgage number. Couldn't find the figures, so wasn't expecting anything.

So for the price of a stamp I have £185 which I never expected and wouldn't have dreamed of but for Martin and this board.

Once again - many thanks

J

Sorry - think this may be on the wrong thread - don't know how to move.

suzyb19

Hi,
I dont think this question has already been asked and answered, I have searched other post and replies, sorry if it has.

We have a mortgage with northern rock and have changed to different mortgage products with them 3 times, in 6 years, once from a endowment to a repayment, once remorgaging to borrow more money and once last year we remortaged when we moved house, are we able to claim exit fees for these, as they are all with northern rock? I cannot find all the paperwork I think it most have got lost in the move.
Also we still have our current mortgage with NR and we cant change mortgage to another company because of financial difficulties at the moment, so don't want to annoy them or make our financial difficulties worse than they already are, but we could do with the money if its there to claim.

1. In short are we likely to have exit fees for all 3 times we changed products with NR?

2. Should we challenge NR about these at the moment, and risk annoying them, or them trying to make our life difficult?

3. Or should we wait till we come out of our current mortgage with NR in Jan 2009, which is quite a while off?

My husband says go ahead and ringor write to them anyway, but I am more of a worrier than him and I dont want concequences from NR.

Any comments, thoughts, help or answers would be apprieceated.

Thanks
suzy

susiesue_2

i have lost all the paper work involving my last mortgage withe the west brom.
if i send a letter with namesa nd address do you think they could work it out from that?

SkylineDriver

MarkyMarkD wrote: »

No, because that was an ERC (early repayment charge) not a MEAF (mortgage exit admin fee). ERCs are completely legitimate and not subject to the FSA's ruling or this thread.

Why, oh why, did you remortgage when you must have been on a good rate with C&G if it was fixed in May 2005? I cannot see an earthly reason why this was a good financial move.

We re-mortgaged as we needed to free up capital in the property and Northern Rock had the best deals on (rates etc) at the time and C&G did not.

freestyleskier

MarkyMarkD wrote: »

The FSA have fully considered the legal situation and they don't agree with you. If they did, they wouldn't have told lenders that it's perfectly acceptable to charge any amount they like, as long as it's agreed up front.

Your argument holds no water. How is it any different to charge an agreed £250 fee at the start of a loan, or an agreed £250 fee at the end of a loan's life? Yet you seem to believe the latter is an unlawful penalty and the former is OK.

You are incorrect about what the FSA have actually said. Their statement is at http://www.fsa.gov.uk/pubs/other/meaf_goodpractice.pdf

I would draw your attention to section 2.6 which states "the lender should ensure that the MEAF represents in fact the cost of the lender's administration services. A failure to do so is also likely to be a breach of contract. You can find further guidance on administration costs in paragraphs 3.8 and 3.9 below."

They have not "told lenders that it's perfectly acceptable to charge any amount they like".

A £250 fee at the start is a price for arranging the loan and can be set to any level. Charging £250 when the mortgage is redeemed early is a penalty charge for leaving the lender as it would not be charged if the customer remained with that lender. Consider 2 examples:

1. Mr and Mrs Brown have a mortgage with ABC lender and move house, staying with ABC lender. To do this ABC lender has to discharge/redeem the mortgage over the previous house and take a new mortgage over the new house. Yet ABC lender does not charge for the redemption of the old mortgage.

2. Mr and Mrs Cameron stay in their existing house and remortgage away from ABC lender to take a deal with XYZ lender. ABC lender has to discharge the redeemed mortgage but charges a fee this time purely because the customers are leaving them.

The amount of work for ABC lender is no different in each case. These are clearly unfair penalty charges and unenforceable in full. Just because something is stated upfront doesn't make it fair and enforceable. That's why the Unfair Terms in Consumer Contracts Regulations exist.

Now consider: Banks are still initially resisting claims for refunding other bank charges from current accounts, credit cards, etc. Yet the same banks are more willing to refund the increases in MEAFs over the mortgage term. Why the difference in attitude?

I'd suggest 2 reasons:
1. The FSA has specifically warned the lenders that they will investigate them if they continue to charge increased MEAFs and this could result in punitative fines over and above refunding the MEAFs.
2. The lenders are getting to settle the MEAFs issue for a lot less than if people claimed the full amount. It is good business sense for them to settle a potential liability for a fraction of what it could (should) cost them.

Unfortunately I don't think that anyone who has settled for a partial MEAF refund will then be able to claim the remainder.

My previous mortgage lender offer to refund £50 out of £230 MEAF charged but I have refused and taken the case to the FOS and awaiting the outcome. In the unlikely event of the FOS ruling against me, I will take the matter to court. I used to work for that same lender and have significant evidence that their MEAF does not reflect the true cost.

bronzewing

Hi, bit of clarification required please:
Left the Halifax in June 1998, took up with A&L in July 1998. Signed into a 40k fixed rate (2 years) + further 3 year tie-in deal for 15 years. Paid off mortgage in Nov 2004.
Original "Redemption and sealing of deeds" rate (1998) £60.
Charged "Early closure admin charge" £295 in Nov 2004.
What is the definition of Early closure or Early redemption, as some earlier posts have repaid in less time yet still been successful in claiming a refund?

frankcrox

Been with Northern Rock for 4 years, re-mortgaged once, due again September, charging £299, should I contact them before then in case they withdraw offer?
:mad: Also charging £1995 for product fee, is this right? :mad: I am already with them and got the same product.

Need advice bad!!!

MarkyMarkD

Freestyleskier

I'm not going to chase you around different threads repeating myself, and I suggest you don't repeat yourself either. I've responded to your first bit

freestyleskier wrote: »

You are incorrect about what the FSA have actually said. Their statement is at http://www.fsa.gov.uk/pubs/other/meaf_goodpractice.pdf

I would draw your attention to section 2.6 which states "the lender should ensure that the MEAF represents in fact the cost of the lender's administration services. A failure to do so is also likely to be a breach of contract. You can find further guidance on administration costs in paragraphs 3.8 and 3.9 below."

They have not "told lenders that it's perfectly acceptable to charge any amount they like".

on the other thread.

As regards the rest of your post:

freestyleskier wrote: »

A £250 fee at the start is a price for arranging the loan and can be set to any level. Charging £250 when the mortgage is redeemed early is a penalty charge for leaving the lender as it would not be charged if the customer remained with that lender.

No, it's not. It's not a penalty for breach of contract. The contract allows the mortgage to be redeemed early. It's an agreed fee - a core term - not a penalty at all.

freestyleskier wrote: »

Consider 2 examples:

1. Mr and Mrs Brown have a mortgage with ABC lender and move house, staying with ABC lender. To do this ABC lender has to discharge/redeem the mortgage over the previous house and take a new mortgage over the new house. Yet ABC lender does not charge for the redemption of the old mortgage.

2. Mr and Mrs Cameron stay in their existing house and remortgage away from ABC lender to take a deal with XYZ lender. ABC lender has to discharge the redeemed mortgage but charges a fee this time purely because the customers are leaving them.

The amount of work for ABC lender is no different in each case. These are clearly unfair penalty charges and unenforceable in full. Just because something is stated upfront doesn't make it fair and enforceable. That's why the Unfair Terms in Consumer Contracts Regulations exist.

Those are a very poor pair of examples. In almost all lenders' case, the fee will be charged in both cases because the first mortgage is being redeemed. The fact that borrower is taking out a new mortgage, on a new property, with the same lender is irrelevant. It's not a penalty - it's an agreed fee levied at the time the mortgage is redeemed.

The UTCCR is a very poorly thought-out piece of legislation which people are attempting to apply to situations where it doesn't apply and/or doesn't make sense. Explain to me again what is different about agreeing when you buy your mortgage to pay:

(a) £250 up-front at the start of your loan, and
(b) £250 at the end of the life of your loan, with the proviso that this fee is waived if you keep the mortgage for the originally agreed term.

freestyleskier wrote: »

Now consider: Banks are still initially resisting claims for refunding other bank charges from current accounts, credit cards, etc. Yet the same banks are more willing to refund the increases in MEAFs over the mortgage term. Why the difference in attitude?

I'd suggest 2 reasons:
1. The FSA has specifically warned the lenders that they will investigate them if they continue to charge increased MEAFs and this could result in punitative fines over and above refunding the MEAFs.
2. The lenders are getting to settle the MEAFs issue for a lot less than if people claimed the full amount. It is good business sense for them to settle a potential liability for a fraction of what it could (should) cost them.

I don't see why you see any reason to speculate about this when it's obvious. The lenders have no choice about what they do - their regulator has insisted that they behave in a particular way, and they cannot (in all commercial sense) do otherwise. And it's punitive by the way.

freestyleskier wrote: »

Unfortunately I don't think that anyone who has settled for a partial MEAF refund will then be able to claim the remainder.

My previous mortgage lender offer to refund £50 out of £230 MEAF charged but I have refused and taken the case to the FOS and awaiting the outcome. In the unlikely event of the FOS ruling against me, I will take the matter to court. I used to work for that same lender and have significant evidence that their MEAF does not reflect the true cost.

As I don't accept there's any case for "claiming the remainder", I can't but agree with you regarding your first paragraph.

As for your second, my view remains that you've been refunded what you are legally and morally due. Seeking more is mere bullying of your lender and if your lender caves in because of FOS case fees, you will have won an undeserved victory.