While a couple of lenders have amended their policies, most are undecided or have expressed their confidence in their current position.
MI gauged industry reaction to the reviewed exit fee approach.
Paul Fincham, senior media relations officer at Halifax: “From 28 February, customers will pay the exit fee that was quoted to them at the start of their mortgage.”
Alex Hammond, PR manager at Kensington Mortgages: “Our exit fees have barely changed in the last couple of years. We don’t use them to supplement our income so we are confident in our position. Most borrowers pay the same fee as set at the start of the mortgage and this is how we see the rest of the market going forward.”
Sally Lauder, senior press manager at Alliance & Leicester: “We were one of the first lenders to react to the FSA exit fee announcement and endorse the route the regulator is taking. Last May, we announced that we would fix the mortgage admin fee going forward for all new borrowers at the level it was when they first took out their mortgage and we have now decided to apply this policy to previous customers who took out their mortgage before August 2004.”
A spokesperson for Abbey: “We will continue to monitor and observe what direction the market takes. We are preparing for various scenarios but we are waiting for the FSA to say what it is going to do before proceeding.”
Julie Gaskin, corporate relations manager at GMAC-RFC: “We are still deciding. There is no definite answer yet but we have only increased our fees once in 11 years, which is lower than the rate of inflation, so we are confident in our position.”
A spokesperson for Northern Rock: “Northern Rock already has a Discharge of Mortgage pledge in place, introduced in April 2005, guaranteeing for new customers after that date to pay only the fee in their contract. In January, we improved that stance by applying the same principle to existing and past customers. Any customer who has redeemed their mortgage and paid a higher fee than that shown in their original contract can reclaim a differential refund by writing to the customer service director and providing details of their case.”
Matthew Wyles, group development director at Portman: “We have cut our exit fees from £199 to £145, which was what it was four years ago. We think ours is a valid and fair charge but decided a protracted discussion with the FSA wasn’t worth it. The whole debate is irrational as exit fees should be the realistic cost of closing the account.”
Bradford & Bingley and Platform said they were currently undertaking reviews and would announce the results in due course.
The industry will wait to see how the FSA proceeds from this point and it seems this issue is set to continue.
Mark Sismey-Durrant, chief executive at Heritable Bank, said: “I can see a rigorous examination of all the product fees that the FSA can find a crack in. Any area of the market could find itself under scrutiny.”
Danny Lovey, sole trader at The Mortgage Practitioner, insisted: “Some of the exit fees are totally unjustified so the FSA will have to decide what to do.”
