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CML slammed for lack of action on exit fees

The Council of Mortgage Lenders has been blasted for “keeping its head down” over exit fees.

Last June, Danny Lovey, sole broker at The Mortgage Practitioner, appeared on BBC Radio 4’s Moneybox programme with Mich-ael Coogan, director-general of the CML.

Lovey says some things advocated by Coogan on the programme have still not been done, even after the Financial Services Authority demanded action on exit fees.

On the show, Coogan stated: “Exit fees are a legitimate cost which relates to service. Lenders should have clear statements as to what the charge is for.”

But Lovey slams the CML for not demanding these statements from lenders and for ignoring its own research.

A survey carried out by outsourcing firm Vertex on behalf of the CML found that the average cost of issuing a mortgage in 2006 from application to completion was £132.85. But financial researcher Defaqto estimates the true cost to be just £35.

Lovey says: “Some lenders are still charging customers over £200. The CML has done a Nelson and turned a blind eye.

“It knows what is going on with these fees but it has just kept its head down.”

A spokesman for the CML says: “We are not in the business of pushing our lenders in certain directions. We support all our lenders’ decisions.”

However, it declined to comment on whether it feels the options offer-ed to lenders by the FSA were correct or whether more could have been done to police exit fees.

Vic Jannels, chairman of All Types of Mortgages, says: “Lenders are entitled to legitimate costs but exit fees have been hiked too high and are not justified.”

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