Following an investigation into the approach and fees lenders adapt to clients exiting mortgage deals, the regulator confirmed it had been in discussions with lenders about changing their policies. Robin Gordon-Walker, spokesperson at the FSA, admitted talks were ongoing with lenders about the subject of exit fees, but had not yet reached a suitable conclusion. He said: “The FSA is not looking at the initial exit fee the lender says it is going to charge, more the lenders ability to vary that fee during the term of the mortgage. Our research showed the variation of exit fee terms did seem to be unfair, but to get them to change terms is a difficult process. We have been in discussions with various lenders for a number of months, and it should have been concluded by now. However there is unlikely to be any announcement before June or July.”
Gordon-Walker added the FSA would look at enforcing change if all other avenues failed. “If there is no agreement then the FSA has the power to enforce change, but is an untested route. The FSA is committed to negotiating with lenders to looking at their exit fee strategies.”
James Cotton, mortgage specialist at London & Country, said: “The FSA is right to look at the way lenders change their fee. Borrowers take out a mortgage dependant on the rates and the fees associated with it and in some cases the fees discussed at the beginning, and those at the end are very different. Some lenders have already started to make changes to their fee policies.”
