Mortgage Exit Fees In The County Courts

If you fancy your chances and still have the nerve, you're next step is to take your claim for mortage exit fees to court. Here's how one Fool would do it.

If you've got this far in your efforts to recover your mortgage exit fees, it's decision time. Do you continue to pursue the full amount of your claim, or just settle for whatever your former mortgage lender has offered you? I have presented the evidence through my previous three articles, so you can now decide whether you want to take this claim to court. The process is the same as reclaiming bank charges, so I've shamelessly, where possible, ripped off my very successful guide to unlawful bank charges.

Don't be frightened by the courts. Small claims hearings (£5,000 or less) are informal; you're not expected to know court etiquette or be able to quote the law in Latin. You simply sit around a table with a judge and a representative from the other party. As an individual up against a big business, the judge is supportive of you. In any case, just like unlawful bank charges, it's unlikely that most mortgage exit fee claims will get as far as an actual hearing before they are settled.

Now to work! Firstly, get all your paperwork together. Then log on to HM Courts Service website Money Claim Online to file your claim. It's free to use this service but you have to register first.

There are eight steps to filing your claim, and you have guidance in the form of a Help button and an online tutorial, so it's very easy on the whole. Even so, here are some helpful pointers:

Steps one to four - easy!

These steps are easy, but bear in mind:

• 'Claimant' means you.
• 'Defendant' means the mortgage lender you're claiming against. Use the defendant's registered name, which should be at the bottom of its letterhead paper.
• When prompted to enter the defendant's address, use the lender's registered office. This address should be at the bottom of its letterhead too.

Step five - the particulars of claim

'Particulars of claim' is a fancy legal term to mean a description of your claim, including the amounts involved, court fees and interest, so that the judge understands precisely what you're claiming. The defendant also has to understand what you're claiming so that it can file a defence.

Let's say that you were charged an exit fee of £250 on 16 February 2003. Here's an example of what you should write in the 'Particulars of claim' box:

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The Defendant has imposed a charge for the administrative costs of closing the Claimant's mortgage. This charge represents a penalty for terminating the contract and does not accurately reflect the Defendant's administration costs. The charge is unlawful re Wilson v Love 1986. Further, it is contrary to the Unfair (Contract) Terms Act 1977 s.4 and the Unfair Terms in Consumer Contracts Regulations 1999. para. 8. Further or alternatively, it is unreasonable within the meaning of the Supply of Goods and Services Act 1982 s.15. The charge the Claimant claims is £250 on 16/02/2003. The Claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year from the date the charge was made, a total of £60.24 up until 20/02/2007 and continuing interest at a daily rate of £0.06 AND THE CLAIMANT CLAIMS £250, interest, costs.

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It's not a pretty paragraph, but that's because you're allowed just 24 very narrow lines of text. You also can't use special punctuation marks. However, it gets the message across.

Calculating interest

In the example 'Particulars' above, I mentioned interest at 8% because this is the interest rate you can claim through the courts at present. In the example the charge was £250. To calculate the annual interest, you multiply £250 by 8. Then you divide by 100. The answer is £20 per year.

Now you get the daily rate by dividing £20 by 365, which is £0.0548. Round this up to £0.06. You then multiply this by the number of days between the date of the charge (16/02/2003) and today's date. If that's today, you have three years and four days. Three years is £20 x 3 = £60. Four days is £0.06p x 4 = £0.24. The total is £60.24.

If you can't work it out, overestimate the interest. The judge can adjust it downwards, but won't adjust it upwards over what you've claimed.

Costs

Mortgage exit fees are still, usually, less than £300, which means your court fees are just £30. But, depending on how much you're claiming, court fees differ:

Court fees for claiming online through moneyclaim.gov.uk

The remaining steps - these are easy too!

You need to tick a few boxes, type your initials and surname, and then make a payment. Just follow the onscreen instructions. Your claim will then be official.

What happens next?

The court will 'serve' the papers to you and to the Defendant. The Defendant then has just a few weeks to respond. In a later article in this series, I'll explain what to do based on whether your mortgage lender responds. Alternatively, you can already read about all this by dipping into The Ultimate Guide To Reclaiming Bank And Card Charges. In particular, the article of interest is Unlawful Charges And Court Proceedings.

> Read The Complete Guide To Reclaiming Mortgage Fees.
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