Recently, we have discussed what a mortgage arrangement fee is, how it came about and how they work on mortgage deals at the moment.  These are all things that you learn during your CeMAP training.

The issue of high mortgage fees is all over the media at the moment and the Chancellor of the Exchequer, Alistair Darling, has made a huge fuss about what he calls the ‘exploitation of the public’ by mortgage lenders.  He has even threatened to ask the watchdog, the FSA (Financial Services Authority) to investigate the lenders level of charges.

Unfortunately, there isn’t much the FSA can do about it – and nor do they want to.

A spokesperson for the FSA said:

“There isn’t anything we can do. Lenders are free to charge any arrangement fee they choose, provided they make this absolutely clear to the buyer. It’s a commercial decision. If customers think the fee is too high, they can go elsewhere.  The FSA’s role is to ensure financial services companies behave in ways that are ‘clear, fair and not misleading’.  We would no more ban a lender from charging a £2,500 arrangement fee than tell Barclays bank it can’t pay more than 3% interest on a savings account.”

Tomorrow we will talk about what borrowers can do to influence the situation.

The role of the FSA is covered during CeMAP training as part of the CeMAP syllabus.