secret commission payment from lender

MA61 · 19 October 2014 at 5:01PM

dunstonh wrote: »

A fee and commission is allowed. However, the commission needs to be disclosed. If the amount of the commission is on any of the documents then its game over. If its not disclosed, then the case mirrors your scenario.

There is no commission mentioned anywhere, just legal costs and broker fee. Thanks for bolstering my view of the situation. I think I will pursue it.

It would be nice to hear from the OP what happened in their case.

magpiecottage · 19 October 2014 at 8:10PM

MA61 wrote: »

My parents have been contacted by another legal firm, regarding the same lender and same period, pretty much offering the same thing, including the 35% fee on a no win no fee basis.

How do these people know about the existence of the loan in the first place? It sounds like personal data may have been obtained unlawfully.

dunstonh wrote: »

A fee and commission is allowed. However, the commission needs to be disclosed. If the amount of the commission is on any of the documents then its game over. If its not disclosed, then the case mirrors your scenario.

As I recall, only the existence of a commission payment need be disclosed. The amount need not be unless asked for but if it is, must be done accurately.

In other words if the broker said "the lender will pay us commission", that is sufficient unless the customer asks how much.

MA61 wrote: »

There is no commission mentioned anywhere, just legal costs and broker fee.

That of course could be because there was no commission - unless you mean by "broker fee", the fee paid by the lender to the broker. Either of these scenarios would mean nothing was wrong.

If a secret commission was paid then Hurstanger says that the broker and lender are jointly liable for reimbursing it to the borrower under civil law. The fact that it was a bribe would be a criminal offence but any fine for that would not go to the borrower.

Brokerwise · 20 October 2014 at 6:16AM

magpiecottage wrote: »

How do these people know about the existence of the loan in the first place? It sounds like personal data may have been obtained unlawfully.
As I recall, only the existence of a commission payment need be disclosed. The amount need not be unless asked for but if it is, must be done accurately.

In other words if the broker said "the lender will pay us commission", that is sufficient unless the customer asks how much.That of course could be because there was no commission - unless you mean by "broker fee", the fee paid by the lender to the broker. Either of these scenarios would mean nothing was wrong.

If a secret commission was paid then Hurstanger says that the broker and lender are jointly liable for reimbursing it to the borrower under civil law. The fact that it was a bribe would be a criminal offence but any fine for that would not go to the borrower.

I think you are referring to the mortgage code with regard commission disclosure. The case mentioned pre dates this by a number of years. I used to work for Ocwen

magpiecottage · 24 October 2014 at 3:16PM

In Hurstanger, the broker was paid a fee by the borrower AND by the lender (i.e. a commission).

Because the existence the fee from the lender was not disclosed it was deemed to be a bribe. Hurstanger (the lender) was found to be jointly liable and required to "reimburse" the fee it had paid to the borrower - i.e. having paid a fee to the broker it then had to pay the same amount to the borrower.

What it did not really establish is what happens if the broker receives a fee from the borrower to source a loan but then offers an insurance for no fee. If the insurance had been offered in the absence of the loan then commission would not have had to be disclosed.

honker123 · 22 December 2014 at 11:45AM

I have a letter from Chafes Solicitors, of Cheshire, dated 17th December saying much the same as has been written here.

When I asked what sort of figure the compensation would likely be if successful, I was told most settlements are in the region of about 20% of the loan taken up.

I have asked them to send paperwork to me, but my initial reaction was that 35% (and I asked and was advised this included VAT) was extremely high, even on a 'no win-no fee' basis.

Now I am very dubious of the whole matter. However, I recognise the name of the firm of solicitors, so am totally confused as to what is happening here. They say they have obtained my details from documentation filed by solicitors acting for the Lender with the Companies Registery......?

Anyone any more up-todate information please? Thanks.

magpiecottage · 22 December 2014 at 8:10PM

Most loans do not require the involvement of a solicitor.

It IS possible to determine if a mortgage has been taken out on security of a property because that is recorded by the LAND Registry. It is also possible to see who the legal owner - the "proprietor" of the property is. (A mortgaged property in England or Wales is still owned by the proprietor it is simply subject to mortgage).

However, in about 1998, residential first mortgages became subject to the Mortgage Code by lenders and fees and commissions started to be disclosed. From 31 October 2004 this became a statutory obligation.

So only if the loan was taken out before 1998, was a second charge loan or a buy to let loan is there a realistic prospect of a secret commission having been paid.

Even then, you will need to prove that such a commission was paid and you were not made aware of it to have any case against either the lender or the broker.

DTD73 · 2 January 2015 at 1:19PM

Is there any update to this, Clearlaw have been doing Credit Searches on Equinox on me and have now sent the same letter claiming to have set up a compensation scheme with Igroup / Ocwen.

magpiecottage · 6 January 2015 at 11:04AM

DTD73 wrote: »

Is there any update to this, Clearlaw have been doing Credit Searches on Equinox on me and have now sent the same letter claiming to have set up a compensation scheme with Igroup / Ocwen.

Did you give your consent to them carrying out a credit search on you?

Who are Equinox? Do you mean Equifax?

beanie65 · 28 January 2015 at 1:59PM

I've had two letters now in last 2 weeks should I ignore them. Tia

dunstonh · 28 January 2015 at 3:09PM

When I asked what sort of figure the compensation would likely be if successful, I was told most settlements are in the region of about 20% of the loan taken up.

I have asked them to send paperwork to me, but my initial reaction was that 35% (and I asked and was advised this included VAT) was extremely high, even on a 'no win-no fee' basis.

The redress payment would typically be the commission. 20% of loan seems way too high. Commission on borrowing tends to be in the range of 0.x%. In Hurstanger, the commission repaid was £240 plus interest.

secret commission payment from lender

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