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Are Loan to Value (LTV) Fees Lawful?


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I think I understand Loan to Value fees and why they are charged to borrowers i.e. If a borrower cannot pay their mortgage, and the Mortg. Co are forced to sell the property for less than the outstanding loan, the Mortg. Co can claim back the shortfall through this insurance - right?

 

According to the Mortgage Code...'Some or all of this fee may be used by the lender, at its discretion, to obtain mortgage indemnity insurance to act as extra security for its sole benefit...'

 

Given its at the Mortg. Co. discretion to take out this insurance, this is where my thinking is at with this one....

 

1) Could I ask my previous Mortg. Co(s). to supply confirmation/details of the indemnity insurance in my case? - given I've paid a fee for it.

 

2) If the Mortg. Co has decided not to use any or all of the money for the insurance - could this constitute an unlawful fee?

 

It's just a shame you can't get a refund when the mortgage is paid back with no short-fall!!

 

Hope my questions make sense - it's getting late!

NatWest

Data Protection Act Letter - 06/08/2006

Statements rec'd 14/9/2006

Preliminary Letter sent - 27/9/06

LBA - 18/10/06

Claim with Court - 31/10/2006

Got until 14/11/06 to acknowledge.

7/11/06 Received ltr offering full settlement minus

interest + court costs

12/11/06 - Rejection sent

17/11/6006 - Natwest Acknowledged

4/12/06 - Rec'd Natwest Def (Cobbetts)

5/1206 - Rec'd partial offer (Cobbetts)

THE WOOLWICH

Data Protection Act Letter - 06/08/2006

List of charges rec'd - 04/9/2006

Prelimary Letter sent - 06/09/2006

Response - 'fully investigating' - 11/09/2006

Claim with Court - 20/10/06

Acknowledged - 20/10/2006

Defence by 17/11/2006

AQ to be returned - 11/12/2006

Court Date - 14/02/2007

**SETTLED IN FULL**

CAPITAL ONE

**SETTLED IN FULL** 3/11/06

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I have had a think about LTV fees for a while. I have came up with the following:

 

As it is at "their discretion" that they are not refundable

 

They are not a penalty, therefore they are not contrary to UTCCR.

 

It is a fee we agree to pay in order to get a higher mortgage for the property than would normally be allowed in that situation.

 

I doubt this post will be the news you wanted, and of course it is only my view and based on some research into this field. However i will keep an eye on this thread as any body else with any news on this may shed further light.

All advice is based on my experiences. I am NOT qualified and as such cannot be held responsible for any mistakes. If in doubt...get professional help.

If you like what i have said then make me a star!!

Some helpful links

I have been successful in many cases..here are links to some

Housing Act and deposits: http://www.consumeractiongroup.co.uk/forum/showthread.php?266260-Deposit-being-withheld.-Please-advise&highlight=

Against Natwest: http://www.consumeractiongroup.co.uk/forum/showthread.php?278646-N-west-v-Mrsfoot-s-Son.-***WON_ALL-CHARGES-REFUNDED***&highlight=

Against Swift Advances: http://www.consumeractiongroup.co.uk/forum/showthread.php?46576-Me-V-Swift&highlight=

Against B&Q: http://www.consumeractiongroup.co.uk/forum/showthread.php?172878-Me-vs-B-amp-Q&highlight=

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You may wish to look at the Unfair Contracts Terms Act 1977 - paragraph below from one of the mortgage ERC claim cases...

 

a fee levied requiring me to indemnify you against any commercial risk to yourself in offering me a reduced interest rate in order to attract my custom is also contrary to s.4 Unfair Contracts Terms Act 1977. I am confident that a court is likely to consider this clause to be unreasonable within s.11 of the said Act as a large commercial institution such as yourselves is in a far better placed position than me as a consumer to bear the burden of the vicissitudes of business

All advice is offered in good faith based on my own research and understanding of the laws involved, however I'm not a lawyer!

 

Please dont rely on annoymous advice posted on a public forum without checking it out for yourself first!

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