LONDON - The Financial Services Authority (FSA) has said that it would be talking to mortgage lenders who are in its opinion charging unfair mortgage administration fees.
The regulator feels that mortgage entry and exit fees have soared in recent times and wants to examine the reasons behind this. Firms will now have to justify the fees that they claim and offer suitable explanations to the lender. In recent months, consumers are growing increasingly frustrated with the inflated fees being charged by the firms, Alliance and Leicester increased its mortgage exit fee by £100 to £295 over the last 12 months.
Concurrent fees in Northern Rock stands at £250, Cheltenham and Gloucester (C&G) claims £225, and Nationwide have introduced charges for the first time at £90. The regulator said that if customers felt that they were being overcharged, then they should first take up the matter with their lender.
The Council of Mortgage Lenders (CML), which represents all major lenders defended the fees being charged, "Fees are going up for a variety of reasons, one of which is the services are being charged more accurately. Another is they're providing fees which are counter-balancing lower interest rates," said Michael Coogan, CML Director General to the BBC in an interview.
C&G said that it would lower the charges in exceptional cases, but felt that the current fees were a fair one and in no way high. It said that only exit charges have been increased, while the other charges had been reduced.
Posted
on : Sat, 24 Sep 2005 17:05 GMT | Mortgages News
By : Salim Patel
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