Tom Marinan, broker at Easypay Mortgages, criticised lenders who insisted on putting outstanding penalty payments on redemption statements, even when they were due to expire. Redemption statements are mostly issued for remortgages and for secured loans on property, and the process can cause mortgage applications to be held up and an outstanding penalty could cause further problems.
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Marinan said: “Lenders won’t issue a statement if there are penalties still on it. So, for example, if a penalty is due to expire on 30 June and I ask for a statement for a mortgage that is due to be completed on 1 July, then they will issue it but it will state that there are penalties still outstanding. Lenders won’t remove the penalties from the statement until after they have expired.”
Marinan also claimed that what a client wanted was a statement that showed that penalties had expired, but there was the problem that you have to apply for this after the date of expiry. Marinan added: “This has happened two or three times to me and it is blatantly absurd.”
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Sue Anderson, head of external affairs at the Council of Mortgage Lenders, commented: “Statements will feature any charges that exist but I don’t know the extent to which they are insoluble – it should be possible to get the fee lifted. Lenders typically don’t know the details of the remortgage that is being prepared, but people will want to know the factors of the penalty and lenders do need to protect themselves. However this is only a problem that will apply in a very small window of time.”
