Mortgage lenders to pay out £200m
March 1, 2007 by admin
Filed under News, News-Mortgages
A large number of major mortgage lenders may be forced to reimburse millions of former customers after a ruling on unfair exit fees.
It follows an ultimatum from the Financial Services Authority (FSA), which stated that lenders had to either justify the increased fees they charged people or revert to the original agreed amount.
The FSA estimates that as many as 2.3 million people who remortgaged in the last five years were overcharged by up to £200 each, meaning that lenders are likely to face a combined payout of around £200 million.
Mortgage lenders were given until February 28th to reach a decision and early signs are that the majority have chosen to reduce their exit fees.
“Certainly the impression we are getting as we go through the responses is that most lenders have gone for the original mortgage exit administration fee option,” said Robin Gordon-Walker of the FSA.
Those eligible for the refund must have remortgaged and been charged a higher exit fee than had previously been agreed.
Exit fees have more than doubled at some lenders since 2003 and people are being advised to contact their original mortgage company if they believe that they have been charged too much.
