Mortgage Discharge Fees** WON !!! **

[Rob S]

Has anyone ever challenged the fees the banks charge for discharging a mortgage? I ask as I recently sold a property and paid off the mortgage. Northern Rock charged me £250 for handling the discharge, a fee I consider to be excessive. I have written to them and asked them if they will reduce this, but all I got was a standard letter stating "its in the T's and C's". If anyone has challenged the fee and got a result it would be helpful to hear from you.

[Rebecca Bloomswood]

I'd like to know the answer to this as well please...

[StudentInDebt]

Have a look at the relevent sections in the Bank Action Group forums but I recall that the discharge fees are a charge for a service rather than a penalty. If you have closed a tied-in mortgage and have paid an early redemption fee then you may have a claim that the ERF is a penalty depending on how it is applied, again - more info available in the relevent forum.

[Rob S]

My issue with Northern Rock is the size of the charge and whether or not they can justify such a hefty charge for the service they are providing. NR charge £250 but Nationwide only charge £90 for the same service. Why do NR charge almost 3 times as much as Nationwide for the same service?

 

Nationwide will also waive the charge if the mortgage has less than 10 years left to run. I had a mortgage with Northern Rock for 16 years and I feel very aggrieved that they have charged me such a hefty fee for a service that I feel doesn't get anywhere close to costing what they have charged me for.

[sidev93]

I was charged a discharge fee of £175 by Chelsea Building Society when I remortgaged recently to a new lender.

I wrote them a standard letter a few weeks ago but did not receive a reply.

 

A LBA letter was sent last week and guess what - I received a cheque for £175 this morning!

[Rob S]

Side,

 

Is there any chance you can post a copy of the LBA that you sent them please?

[eacd]

I'm also in the process of being [edit] by Northern Rock to the tune of £250 to redeem my mortgage. I will write and explain I don't want to pay it. Very new to this, what is an LBA? And would I also bennefit from having a copy?

 

[MODERATED: Please do not post libelous comments on this site]

[zootscoot]

An LBA is letter before action which should be sent 14 days after your preliminary letter and 14 days before maing a claim. There is a copy in the templates library.

 

The fee you are referring to is most likely to be an admin fee rather than a redemption fee which tends to be much higher. Admin fees are a charge for a service rather than a penalty for breach of contract and as such they can charge what they like. Much in the same way a barrister or a plumber can set their own fees.

 

Although if no charge was agreed at the time of taking out the mortgage contract it may be that you can challenge it under the Supply of Goods and Services Act which implies a term that where no price was agreed a reasonable sum is payable.

[Rob S]

The letter I got back from Northern Rock stated that one of the things that the £250 fee covers is the "electronic discharge of our charge registered at Land Registry". I e-mailed the Land Registry and asked them what charge is levied for this service. The answer??.....................................nothing!!!!

 

I don't mind paying a reasonable fee for the service but given that all Northern Rock had to do to discharge my mortgage was to :-

 

a) Prepare the redemption statement and the associated administration

b) The electronic discharge of their charge registered at Land Registry (which costs them nothing)

c) Despatch of the title documents

 

I don't see the above costing £250. Nationwide charge £90 for the same service. So I have just written to them to ask me for a full breakdown at how they arrive at such a figure.

[Rosemary]

Hi Rob

 

Take a look at this website which I spotted today - relevant to your 'cause'. It might give you a bit of confidence to your argument and lead you to some other areas of research in this area. Good luck.

 

Remortgaging guide, mortgage remortgage, remortgage uk, bad credit mortgage - The scandal of mortgage exit fees

 

Kind regards

Rosemary

[Rob S]

Rosemary,

 

Thanks for that link, it will prove most useful. Its good to know that the level of the exit fees is coming under the microscope.

[WildCath]

Rosemary

 

Great link!

 

I am so desperate for someone to just tell me if I have a case against Northern Rock who are currently awaiting for me to pay them over £2K including the £250 for discharging the account. In my case, I have not yet paid the fee so they are threatening taking the 'default' action. By this I assume taking actions to get their money.

I wrote a letter of complaint and they wrote back saying 'Sorry' but you have to pay because we did release the funds to the solicitor, and I am saying 'Sorry No' because, I never encashed the cheque i.e. the money never entered into my account.

 

I have drafted a letter today stating 10 items as the 'Terms of Reference' for my complaint and why I am only prepared to pay the £250 discharge fee.

 

Some comments/adice would be most welcomed.

 

WildCath

[WildCath]

Rob S,

I am following your case with keen interest, tho Northern Rock, I only have five more days to respond to their last correspondence.

WildCath

[sidev93]

Hi,

 

Further to my original post here is a copy of the letter that I sent to The Chelsea. Basically I just cobbled the template letter and replaced bank charges/penalties with discharge fees. Hope this helps

 

Chelsea Building Society Mr xxxxxxxxxxxxx

Thirlestaine Hall xxxxxxxxxxxxxxxx

Thirlestaine Road xxxx

Cheltenham xxxx

Gloucestershire xxxx

GL53 7AL

 

 

 

 

LETTER BEFORE ACTION 13 July 2006

 

Dear Sir/Madam,

 

Mortgage account number: xxxxxxxx

 

I am very disappointed that you have failed to respond to my letter of the 28th June 2006.

I now understand that the regime of ‘fees’, which you have been applying to my account in relation to discharge fees, are unlawful at Common Law, Statute and recent Consumer regulations. I would draw your attention to the terms of the contract that you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner that complies with UK law.

 

I am frankly shocked that you have operated my account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary.

 

I calculate that you have taken £175. I require repayment in full of this money and if you do not comply fully within 14 days then I shall begin a claim against you for the full amount plus interest plus my costs and without further notice.

 

 

Yours faithfully,

 

 

 

 

 

 

xxxxxxxx

[craigamc]

Hi SideV93

 

I am in a similar situation to you.

 

We have also been charged a discharged fee of £175 onto of the interest of £2700.33 and the redemption interest of £2069.35

 

Its not on.

 

I have received a reply back today referring me back to the original mortgage offer of advance and the terms and conditions.

 

What do you think I should do next? Write to there relations department as they suggest?

 

ta

craig

[Rob S]

I got a reply from Northern Rock yesterday. They have offered me a goodwill gesture "in full and final settlement of your complaint" of £90. It's a start, but they have failed to answer my direct questions relating to a full breakdown of their costs. I am tempted to send their agreement back with the words "full and final settlement" crossed out, thank them for their interim payment and carry on the fight!

[sharont1]

We are in the same position as you and have just paid the £250 to the northern rock with a view to claiming it back through the correct channels. What did you decide to do in the end? ie take the money and run or carry on fighting.

 

We have also had to pay a £25 option fee annually to pay by cheque and not direct debit and would like to challenge this, does anyone else have this problem.

s

[Rob S]

I wrote to them today and asked them to answer my original questions i.e to give me a full breakdown of their costs. I'm taking this one all the way. There is nothing to lose after all:)

[gizmo111]

We are in the same position as you and have just paid the £250 to the northern rock with a view to claiming it back through the correct channels. What did you decide to do in the end? ie take the money and run or carry on fighting.

 

We have also had to pay a £25 option fee annually to pay by cheque and not direct debit and would like to challenge this, does anyone else have this problem.

s

 

I think this is probably a legit charge as it takes them more effort to bank a cheques each month etc.

[johnrambo]

I have a similar problem when recently re-mortgaging. The 3 year discount from Accord mortgages expired and they failed to offer another deal so I changed providers. What I did not bargain for was the redemption administration fee charged of £199. Whilst I appreciate that a fee should be made, what I object to is the increase, as when the mortgage was taken out, this was £75. The rise is 169% in 3 years, and I have written to them to protest that this is excessive and in no way reflects an actual increase in their costs. Thus far I have no response but would be interested in other experiences, and how success has been achieved. There have been articles about this in the Guardian Saturday money section eg. Aug 5th - Guardian Unlimited Money | ZZZ Front | Capital Letters

[sharont1]

Rob

I have had aletter today form nr offering me £110 as full and final settlement but again no breakdown of why they charged us so much. What was your next move

[Rob S]

Sharon,

 

They offered you £110 but only offered me £90?? I am aggrieved!!!

 

I wrote to them asking them to provide me with a full breakdown of their costs (again) I am still waiting for their response to that.

[sharont1]

did you take the money and write a further letter?

I am happy for you to quote me that i have been offered 110

[Rob S]

No Sharon, I didn't take the money. They treated my letter as a formal complaint and initiated their complaints procedure. The offer was conditional on my acceptance of it in full and final settlement of the matter. I wasn't prepared to be hamstrung by that.

 

Thanks for the offer of quoting you, I might well take you up on that should I feel it necessary in the future.

[Llyllyll]

Sent my preliminary letter to Bank of Ireland asking for my £195 release fee to be refunded.

 

I got a non-standard letter back stating that the matter was now under investigation by the in-house compliance department and was being dealt with under their internal complaints procedure.

 

BOI complaints procedure states that they will write with their findings within 4 weeks. As I've had a non-standard letter should I allow them this 4 weeks or just proceed with the LBA?

 

Thanks,

Llyllyll