ASIC released guidance for mortgage lenders that sets out how provisions in the National Credit Code which is part of the National Consumer Protection Act 2009 and unfair contract terms provisions of the Australian Securities and Investments Commission Act 2001 apply to mortgage early termination fees (exit fees): Regulatory Guide 220 Early termination fees for residential loans: unconscionable fees and unfair contract terms (RG 220). This follows consultation leading up to and after the 1 July 2010 start date for the new legislation. ASIC’s guidance covers, among other things, what costs and types of loss can be included in exit fees, what types of loss should not be recovered through exit fees, the circumstances in which a lender may vary exit fees during the life of a mortgage and how lenders can explain their early exit fees transparently.
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