Dear editor,
I switched my mortgage from Woolwich last November and was hit with a scandalous £275 ‘final repayment charge’. No redemption fee was applicable.
As I had been quoted £50 for this fee six years earlier, I was naturally disgusted at my lender’s greed.
There has been much quoted in the press about current account holders reclaiming fees that failed to reflect the true cost of the admin, so I modified a standard letter for this purpose that I downloaded from www.moneysavingexpert.com, which now has downloadable letters for mortgage exit admin fees (MEAFs)
The first response from Woolwich was dated two days after I had posted my letter and was roughly to the tune of ‘we have every right to charge whatever fee we like, and here’s a list of what the fee covers. We now consider this matter closed’
I didn’t consider this matter closed – quite the opposite. Its aloof response had spurred me on. I downloaded the second letter from the same website, this time threatening County Court Action.
Three weeks later, just as I was ready to download the third letter, I got my reply. My account had been credited with £180 plus £1.49 interest. I’m satisfied with that, and now I do consider this matter closed, except to say that everybody reading this should be shouting about it from the rooftops.
I would assume that, as with current account fees, we can all go back six years with this. Imagine how much could the MI’’s readership save their clients in total
.
Kevin Spelman
Reddish Insurance
The cost of ‘Treating Customers Fairly’
Dear editor,
Last week I got asked how much it had cost my business to implement the Financial Services Authority’s (FSA) ‘Treating Customers Fairly’ (TCF) guidelines. I had no idea at the time, and after a little bit of research I was surprised with
my findings.
My first piece of research was on the Council of Mortgage Lenders’ (CML) website where I came across a terrific and useful link: www.tcfinfo.co.uk/mepasite/62/Home.aspx. This website and checklist was compiled by seven founder lenders and, believe it or not, was one of the most easily read factual pages I have come across in a very long time.
I quickly found out that TCF covers many elements of the mortgage process including promotional material, the advice and sales process, client contact information, complaint handling, TCF training and awareness, remuneration and incentives, management information and product understanding
As a medium-sized mortgage brokerage we found, with a sigh of relief, that there was no additional cost to the business as we already had in place the correct mix of people, process and technology, allowing us to provide to clients the appropriate advice and record keeping that the FSA suggested, covering all of the above points.
However, I’m in no doubt that there will be some additional cost attached to the smaller businesses out there as they may need to make changes in technology, record-keeping and may see an increased cost in compliance.
In summary the link shown is a great user-friendly tool that will soon point out what needs to be done and will allow you to get an idea of how much it will all cost. I hope you find it useful.
Darren Pescod
Managing director
The Mortgage Broker Ltd
A victory for brokers
Dear editor
After reading last week’s story by Mary Ring on Nationwide’s refusal to accept the Association of Mortgage Intermediaries’ (AMI) client ownership letter by fax (Mortgage Introducer, 10 March 2007) I felt compelled to write in.
I have never heard such tosh in my life. It is issues like this that brokers should not have to put up with in our daily working lives. Our time should be spend on advising clients on the best mortgage for their circumstances, not chasing up greedy lenders who use ridiculous excuses, such as not accepting letters by fax as a means of trying to tap up our clients.
AMI has been excellent in driving this initiative forward and, I believe, even sought legal advice to ensure there was no get out clause for lenders. Yet of course, they will find a way around anything.
The fact that Nationwide has confirmed it is reconsidering its stance on the matter is a victory for the industry. Intermediaries should not be shy in condemning lenders for such practices and I applaud Peter Wright for bringing the issue to everyone’s attention. May it be a point worth noting for all lenders. Let’s just hope that Nationwide actually sticks to its word.
Name and address withheld
Going green
Dear editor,
Go ‘green’. That’s all we have heard about over the past few weeks and months. An agenda being pushed by the ‘greener than green’ David Cameron, the bandwagon is in full flow.
Every political party is now devoting time and energy to this growing issue, but I don’t understand how green mortgages will have any massive affect on the mortgage market. Of course, there are the super-eco-friendly people out there who will only buy organic products, recycle everything, cycle to work and do all they can to help improve the environment, but these people, in the grand scheme of things, are very much in the minority. A green mortgage will undoubtedly appeal to these, but many people are more concerned about the interest rate attached to the product rather than the impact on the
environment.
This is not intended to have a go at those interested in helping improve the environment, it is an issue that needs addressing. But this issue will never be to the detriment to product prices and incentives, such as free legals, cashback and so on. While we all have a role to play in helping the environment and promoting a healthier earth, the truth is most people consider this a side issue to their life. Saving money on a mortgage, to most people, comes first.
We should continue to promote recycling and other efforts to help the environment, but green mortgages will become the most niche sector in the market and have a very minor role to play.
Name and address supplied
Fees release me
Dear editor,
I write in response to ‘Brokers beware of up-front charges’ (MI Online, 13 March 2007). What a complete load of rot.
Punative measures handed out to lenders on exit fees? What planet is Richard Brown on? Hardly nothing has changed and arrangement fees went sky high months ago. When lenders start charging true administration fees that are relative to their costs for MEAFs, then will be the time to talk about other ways to make up their shortfall. They had already factored an element into their arrangement fees ahead of the event and are now coining it in.
Name and address supplied
