OZschwitz: Anti-free trade ASIC targets exit fees

FEES that penalise borrowers for ditching their home loan during the first few years of a mortgage are under scrutiny by the corporate regulator, amid concerns some charges could breach consumer laws.

Early exit fees have been banned for all new loans signed from July 1. However, the ban does not apply to millions of loans issued before the new law came into force.

Some lenders were offering loans with exit fees of more than $5000 only months ago, and the Australian Securities and Investments Commission is reviewing whether these fees breach recent laws on unfair and unconscionable practices.

For those loans entered into before July 1, exit fees can only cover a lender's costs that arise from terminating a loan. They cannot be used to make a profit from the borrower.

http://smh.domain.com.au/real-estate-news/asic-targets-exit-fees-20110829-1jh10.html

OZschwitz: Anti-free trade ASIC targets exit fees

OZschwitz: Anti-free trade ASIC targets exit fees

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