Question: Can a mortgage lender put fees up during mortgage?

Melissa177

Hi,

I've read with interest the current battle that some mortgage payers are having with their lenders regarding exit fees. Homeowners won the right to claim back fees that were not included in the original mortgage contract, but imposed afterwards.


I have a slightly different issue, but on the same theme.

I have just bought a property, Scottish Widows is the lender. I received a list of tarriffs at the time I applied for the mortgage and when I signed the mortgage contract for items like "unpaid DD fee", and "property letting fee".

The property letting fee was a one-off charge of 125 pounds, should I wish to rent out my property - this permission could not be unreasonably withheld by the lender.

I am, in the future, thinking about letting out my property (company is thinking about relocating me to Geneva), so I was satisfied that the 125 pound fee was not astronomical.

Yesterday I received another tarriff of charges doc from SWidows, along with my mortgage statement. Now the property letting fee is listed as "up to a maximum of 450 pounds annually" :eek:

I am not sure SW can do this - this was not the original T&Cs in my contract.

Can anyone advise? Surely SW cannot hike the charges after I have signed up to them.

I'll cross post this on the Mortgage Board too.

Thanks in advance any advice.

Best wishes,
Melissa

RHemmings

I don't know the answer to your question, but would like to ask that if you find the answer somewhere else, could you please post it here.

I've always been curious about these contracts where terms get changed, and the customer seems to have no choice in the matter. If a mobile phone customer wrote a letter to their supplier saying that the amount the customer is paying for calls will halve, then the supplier I'm sure could just ignore it. So why not the other way around?

The newsgroup (http://groups.google.com and elsewhere) uk.legal.moderated might be another place to ask.

I was reading up on some unfair contract conditions judgements by the OFT. Often they were to do with allowing the vendor (e.g. holiday firms) to change fees and charges without valid reason. I can't find those pages now, but look at page 45 (as numbered on the pages) of this:

http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft311cons.pdf

Though I don't know if you'll find it useful.

Melissa177

I've managed to leave all my mortgage stuff in my filing cabinet at work, so it will be Monday until I can go through it with a fine tooth comb (again!), but I was pretty sure moving the T&Cs unreasonably was illegal.

Thanks for the helpful links. The OFT website says:

If a term could be used to force the consumer to accept increased
costs or penalties, new requirements, or reduced benefits, it is likely
to be considered unfair whether or not it is meant to be used in that
way.

This seems to be what I am after. Unfortunately, Annex A in the OFT link isn't part of the document.

Debt_Free_Chick

Are you sure there was nothing in the original agreement?

Nothing to state that the agreement could be amended by SW giving you notice?

Nothing that suggests that the fees would be "as determined, from time to time"?

It would be incongruous (though not impossible, I admit) to think that a large company would make changes where it had no power to do so.

Melissa177

Debt_Free_Chick wrote: »

Are you sure there was nothing in the original agreement?

Nothing to state that the agreement could be amended by SW giving you notice?

Nothing that suggests that the fees would be "as determined, from time to time"?

It would be incongruous (though not impossible, I admit) to think that a large company would make changes where it had no power to do so.

Well, that is what I'm assuming - but because contracts can contain unfair Ts&Cs (as described in the OFT link above), these aren't necessarily legal. If there is an administrative fee that needs to be reasonably changed, that is understandable - however, a one-off payment of 125 pounds is quite different to a 450 ANNUAL fee.

Regarding large companies "making changes where they had no power to do so" - just look at the argument about bank charges, and people reclaiming them back, and also the mortgage exit fees argument: these were unfair conditions imposed by the banks, and they are now having to cough up.


I will get my contract out on Monday - I keep a lot of personal mortgage stuff in the office so I have it to hand when dealing with call centres, and so I don't have it to hand at the moment.