A broker has branded the Council of Mortgage Lenders “duplicitous” for changing its stance on exit fees.
In January, the CML endorsed the Financial Services Authority’s good practice on exit fees policy, under which the FSA gave lenders until February 28 to decide whether they would charge existing customers no exit fees, the original exit fees, revised exit fees or increased exit fees.
The regulator warned that lenders adopting the last two options would be required to justify their decision.
The policy stipulated that the FSA would investigate lenders that increased their exit fees beyond those originally quoted to customers.
But Danny Lovey, proprietor of The Mortgage Practitioner, has questioned the CML’s commitment to the exit fee policy, following a statement it made in its recent News and Views newsletter.
The trade association’s May news-letter states: “We believe fees and charges should be transparent at the time customers take out loans. But the reality is that lenders run their businesses on the basis of an anticipated level of income.
“If income is lower than expected, it should be no surprise if lenders att-empt to adjust for this by looking at their costs and fees.”
Lovey says this statement indicates that the CML has changed its tune by saying it is acceptable for lenders to adjust fees in certain circumstances.
He says: “It seems from the CML’s newsletter that it is standing on its head, apparently oblivious to its joint statement with the FSA on January 26.
“It is the season of awards for everything from the greatest lovers to the greatest liars. And this year’s award for the most duplicitous organisation in the mortgage business goes to the CML.”
The trade body declined to comment or clarify its position on exit fees.