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  • FIRST POST
    • kempstar
    • By kempstar 14th Jun 17, 10:34 AM
    • 131Posts
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    kempstar
    Is this mortgage fraud or conspiracy to fraud?
    • #1
    • 14th Jun 17, 10:34 AM
    Is this mortgage fraud or conspiracy to fraud? 14th Jun 17 at 10:34 AM
    Hello

    I am in the middle of a dispute with a mortgage broker. Part of what they have done was that they asked me to not disclose incentives to my mortgage lender. I refused this, and told my Solicitor straight away. They still very much intended to hide these incentives. The incentives included - stamp duty paid, free legals, rental guarantee for six months, free property management for six months and interest on exchange deposits.

    Here is the relevant email from the broker-

    Please note that the developer contributions being offered can affect the lending (the value of the contributions would be seen as cash incentives and as such would be taken off the purchase price) so we would have to ensure they werent made known to the valuer. Ive made XXXXX aware of this, so that he is up to speed and we would ensure that the developer didn’t disclose this on his paperwork too.

    (XXXXX is a broker in the firm)

    I have contacted ActionFraud and also the Property Ombudsman Service, and they have both been no help whatsoever. I want to make a serious complaint against the firm, and want to know how much leverage this gives me.
Page 1
    • glosoli
    • By glosoli 14th Jun 17, 10:42 AM
    • 557 Posts
    • 304 Thanks
    glosoli
    • #2
    • 14th Jun 17, 10:42 AM
    • #2
    • 14th Jun 17, 10:42 AM
    Has your application actually completed yet or are you still going through the process? To my understanding intentionally withholding information from the lender which could influence their decision to lend would be mortgage fraud yes.

    If your going to persue it to the degree as mentioned in your post then he will have a major headache on his hands.
    • ACG
    • By ACG 14th Jun 17, 10:46 AM
    • 15,050 Posts
    • 7,611 Thanks
    ACG
    • #3
    • 14th Jun 17, 10:46 AM
    • #3
    • 14th Jun 17, 10:46 AM
    A broker has a responsibility to make the lender aware of anything they ask for. Personally I try to make them aware of anything that could be an issue that they do not ask for so as to avoid issues down the line.

    If the broker is going out of their way to colude and keep something like that away from the lender, then it is fraud in my opinion.

    If you are concerned about this, then you can let the lender know. They will take it seriously I am sure.
    Last edited by ACG; 14-06-2017 at 10:48 AM.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • kingstreet
    • By kingstreet 14th Jun 17, 10:54 AM
    • 31,582 Posts
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    kingstreet
    • #4
    • 14th Jun 17, 10:54 AM
    • #4
    • 14th Jun 17, 10:54 AM
    Is this a newbuild?

    If so, is it HTB?

    Which lender is it?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • rtho782
    • By rtho782 14th Jun 17, 1:29 PM
    • 949 Posts
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    rtho782
    • #5
    • 14th Jun 17, 1:29 PM
    • #5
    • 14th Jun 17, 1:29 PM
    Sounds like you are using the developers appointed mortgage broker on a newbuild?

    This is probably a bad idea...
    Deposit Saved since 01/12/15: £13,000 / £15,000 House Bought!

    Debt Cleared since 01/12/15: £6,000 / £7,500
    • amnblog
    • By amnblog 14th Jun 17, 2:27 PM
    • 9,533 Posts
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    amnblog
    • #6
    • 14th Jun 17, 2:27 PM
    • #6
    • 14th Jun 17, 2:27 PM
    Pretty amazed that a regulated broker firm would:

    1. Suggest this

    2. Put it in an email

    Your post, however, suggests that the dispute is wider than this?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Lilla D
    • By Lilla D 14th Jun 17, 2:39 PM
    • 236 Posts
    • 108 Thanks
    Lilla D
    • #7
    • 14th Jun 17, 2:39 PM
    • #7
    • 14th Jun 17, 2:39 PM
    ActionFraud and the Ombudsman would be no help at this stage due to the complaint procedure you have to follow. In the first instance you'd have to make a complaint to the brokerage itself who will be obliged to acknowledge it, investigate it and come back to you and potentially offer a resolution of the problem. If you are not happy with the outcome, that's when you can take it further.

    The broker should have sent you a disclosure form about who to contact in case of a complaint. It's normally an appointed complaints handling officer, but if you contact someone above the broker (by the sound of it, you're not talking about a sole broker company), then they should be able to help.

    What the broker said about the incentives potentially influencing your borrowing amount is true, but a suitable lender has to be chosen in view of the incentives. Actively hiding it from the lender is not the solution and you're right, it could be classified as fraud as per ACG's reply.

    Contacting the lender may also be a good idea, because if they think that you were part of the cover-up attempt in any way, they may put you on a fraud list that could prevent you from getting a mortgage anywhere.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • dunstonh
    • By dunstonh 14th Jun 17, 2:40 PM
    • 88,318 Posts
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    dunstonh
    • #8
    • 14th Jun 17, 2:40 PM
    • #8
    • 14th Jun 17, 2:40 PM
    I have contacted ActionFraud and also the Property Ombudsman Service, and they have both been no help whatsoever.
    That is because it is not within their remit.

    I want to make a serious complaint against the firm, and want to know how much leverage this gives me.
    And that is what you should do. Mortgage brokers are regulated and there is a defined complaints process and access to the FOS at the end (if you dont get an outcome you are happy with).

    The broker should have supplied you with an initial disclosure document that has the address or telephone number or email to use for complaints.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • kingstreet
    • By kingstreet 14th Jun 17, 2:42 PM
    • 31,582 Posts
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    kingstreet
    • #9
    • 14th Jun 17, 2:42 PM
    • #9
    • 14th Jun 17, 2:42 PM
    Is the broker directly authorised, or an appointed representative of a network?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • amnblog
    • By amnblog 14th Jun 17, 3:04 PM
    • 9,533 Posts
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    amnblog
    The broker should have supplied you with an initial disclosure document that has the address or telephone number or email to use for complaints.
    Originally posted by dunstonh
    Good luck with that one Dunston if they are happy to falsify CML Decs.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • davidmcn
    • By davidmcn 14th Jun 17, 3:09 PM
    • 5,413 Posts
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    davidmcn
    Hmm. It doesn't sound like mortgage fraud (because you disclosed the relevant info to the lender), and it's not conspiracy to commit fraud (because that takes two people planning to do it, not one person suggesting it and the other rejecting it). But it's certainly worthy of complaint/reporting to the regulators at the very least.
    • dunstonh
    • By dunstonh 14th Jun 17, 3:14 PM
    • 88,318 Posts
    • 53,540 Thanks
    dunstonh
    Good luck with that one Dunston if they are happy to falsify CML Decs.
    Originally posted by amnblog
    As I was typing it it, I was thinking that they probably didnt issue it. However, if it isnt, then all the Op has to do is look up the company on the FCA register. That has the complaints address on it and they can add the failure to supply the document to their list of complaints.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • kempstar
    • By kempstar 14th Jun 17, 3:47 PM
    • 131 Posts
    • 14 Thanks
    kempstar
    Hmm. It doesn't sound like mortgage fraud (because you disclosed the relevant info to the lender), and it's not conspiracy to commit fraud (because that takes two people planning to do it, not one person suggesting it and the other rejecting it). But it's certainly worthy of complaint/reporting to the regulators at the very least.
    Originally posted by davidmcn
    Thanks for all the replies everyone. Just to address the above reply - I think it almost certainly is conspiracy to commit fraud. Perhaps it was not clear in my email extract, but that is from one person at the brokerage emailing me, and he/she also refers to XXXXX, so there are two people involved.

    It is also part of a wider complaint. The broker also has a property sourcing arm. They sourced a property for me and charged a fairly significant fee. They assured me that the property they found me would be mortgagable. We have exchanged, and the properties have since been found to not be mortgagable. Four seperate surveyors have refused to give them a value based on various reasons.

    I am in the position where I could complete for cash, even though I do not want to. I would prefer to withdraw from the exchange, which will obviously be difficult. I am looking at my options for claiming back the sourcing fee, on the grounds that the properties were not mortgagable. I am hoping to use the fraud angle as some leverage, as I think the fines for brokers breaking the rules in this way can be very high.
    • amnblog
    • By amnblog 14th Jun 17, 4:01 PM
    • 9,533 Posts
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    amnblog
    As you lift the layers it smells more and more.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • kempstar
    • By kempstar 14th Jun 17, 4:07 PM
    • 131 Posts
    • 14 Thanks
    kempstar
    Tell me about it. I have already spoken to a Solicitor about attempting to withdraw from the exchange based on the "mortgagable" representation. I think this will be difficult, costly, as well as time-consuming.

    I am starting to think that the best approach would be to complete for cash. Then to pursue the broker/sourcer for a refund of all fees as well as some compensation, with the threat of taking the fraud complaint further.

    The property itself is in a block of flats, and the flats that have already completed (these were cash buyers) have rented out quickly.

    I think a couple of years down the line, it may be possible to refinance, as the main issue highlighted by the surveyors has been a lack of comparables in the area. Most of the properties in this part of the City are two bed houses rather than flats. In a couple of years, all of these purchases will be visible on the land registry, giving comparables, plus they will no longer be considered new builds.
    • fewcloudy
    • By fewcloudy 14th Jun 17, 4:33 PM
    • 147 Posts
    • 72 Thanks
    fewcloudy
    I am starting to think that the best approach would be to complete for cash. Then to pursue the broker/sourcer for a refund of all fees as well as some compensation, with the threat of taking the fraud complaint further.
    Originally posted by kempstar

    Hmm. Not sure about this bit. I think you should either report them for suspected mortgage fraud, or not.

    But threatening to expose them/report them unless they refund you all your fees sounds like some sort of blackmail.

    fc
    Feb 2008, 20year tracker with Sprogget and Sylvester, 0.5% + base for 2 years, then 0.99% + base for life of mortgage. Mortgage broker every time for me...
    • silvercar
    • By silvercar 14th Jun 17, 4:38 PM
    • 35,486 Posts
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    silvercar
    Do you really want to complete on a flat that is effectively unmortgageable?
    • societys child
    • By societys child 14th Jun 17, 4:42 PM
    • 4,303 Posts
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    societys child
    refund of all fees as well as some compensation, with the threat of taking the fraud complaint further
    Blackmail is not a good idea . . .

    • kempstar
    • By kempstar 14th Jun 17, 4:50 PM
    • 131 Posts
    • 14 Thanks
    kempstar
    Do you really want to complete on a flat that is effectively unmortgageable?
    Originally posted by silvercar
    Ideally no, ideally I would just walk away. However I have exchanged, so I cant do that. Well I could, but I would lose my exchange deposit (£10k), plus the sourcing fee, plus legal costs incurred, plus potentially damages.

    The flats are renting well, and getting a decent income. It is not a huge amount of cash (£100k).

    The sourcing company have said that they may be able to speak to the developer about releasing us from the contracts, and refunding our fees in full, but only once they have been remarketed as 'cash only', and sold.

    This could take a long time, they might sell for lower than we paid, they might never sell! To be honest, I dont want the stress of this hanging over me for another few months.

    And of course I will not be outright blackmailing this company, however if there is any way I can use this as leverage to get my money back then for sure I will be doing it.
    • getmore4less
    • By getmore4less 14th Jun 17, 8:08 PM
    • 29,139 Posts
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    getmore4less
    property sourcing company with connections.....

    I thought people had stopped falling for those scams after Inside track and Instant Access Properties took people for a big ride back in 2000s..
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