Danny Lovey, at The Mortgage Practitioner, says deeds release fees, which are charged by some lenders when the client leaves the mortgage deal, are simply being used as a retention tool to manipulate clients to stick with the lender.
He said lenders were being ‘sneaky’ in their tactics by not charging these fees when the client enters the deal but charging it when the client wants to leave. Lovey said lenders should charge one-off upfront fees to avoid this lack of transparency. He said: “A few years back lenders were charging nothing to £50 but now it’s going up all the time.
“Alliance & Leicester, for example, is charging £295. All lenders have their charges but this fee is just a way of manipulating the client and moving the goalposts when the client is locked in.”
A list of deeds release fees from the Trigold system shows A&L charges one of the highest at £295, followed by Northern Rock at £250 and Mortgage Express at £235. But some lenders, such as Nationwide and Skipton Building Society only charge £90 and £75 respectively.
Jaqualyn Purcell, PR manager at Northern Rock, said: “We refute any claim that we are not transparent about fees associated with a mortgage.
“In accordance with MCOB details of fees, including the deeds release fee, are forwarded to applicants during the application process. We also send out a fees tariff to borrowers with their regular mortgage statements.”
But Robin Gordon-Walker, spokesman at the FSA, warned: “We have rules about excessive charges. If one lender is charging what is deemed as excessive fees to clients when compared to similar fees in the market, we would look into it if a claim is made.”
