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Don’t hold your breath waiting for NR to waive clawbacks

By advising customers whose mortgages are due for review that it might not be able to offer them competitive products, Northern Rock has made clear its intention to shrink its mortgage book.

In the past, NR had a clever way of retaining business. It charged hefty product fees and then, through altruism, helped customers to pay these fees by turning them into grants.

This sounds great except for the fact that in most cases, clawback terms ex-tended beyond product terms.

But NR had this covered too. Clients simply had to take further help with costs options rather than penalties if they moved to other lenders.

Now the lender is effectively telling its customers to go elsewhere.

So what will happen to borrowers whose deals have clawback overhangs? If it is NR’s policy to drive them away, surely the lender should waive the clawbacks.

I’m not a betting man and did not have as much as a shilling on Ports-mouth and Barnsley making it to the FA Cup semi-finals, but I reckon that was about as likely as NR waiving its clawbacks. We’ll see.

Dave Rogers


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