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Fees and indemnity

Fees and indemnity

By Ben Wyatt

Has your bank charged you too much to discharge the mortgage? Property lawyers will be able to identify with the question posed here as it is an issue that a borrower/mortgagor often asks. How is it that I have to pay these additional fees just because I am in default? The contract that a client enters into with a financier is supported by security over land in the form of a mortgage. Both the general conditions of mortgages and most loan agreements contain clauses that entitle the lender/mortgagee to recover from the borrower/mortgagor costs associated with any default. These costs can relate to letters of demand, default notices and recovery proceedings, and often are comprised of solicitor's bills which are then added to the client's loan statements and put through as part of a debt outstanding to be paid at settlement. The particular clauses in loan agreements and the standard conditions of mortgage are worded in such a way that most clients accept the charges as being an impost that they have to pay, but in fact are often over inflated because most clauses would be considered by the courts to be no more than an entitlement on the part of the lender to seek costs on a standard basis pursuant to the Supreme Court scale.

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