Rip off morgage setup fee.

mat1234

Hi I need some advice regarding a situation that has a risen. My work is property development and I have been doing this some ten years. I recently needed to finance a commercial property so put a couple of Brokers on the case to find the best deals. It was a unusual case and being commercial wasnt easy to find finance.

One of the brokers came a cross a morgage company who might be able to help. I had to fill out the pages of application form that they required and signed the forms which the Broker returned to the company. I also had to send a cheque for £ 800 for the valuation. Now I wasnt to sure about this , as at this stage there was no offer or any indication their could be. I questioned the fact I had never paid for a survey before an offer is made, but was told this was just the way this company operated. I still stated in ten yrs I had never needed to do this.

Time went pass and the company came back with a dreadfull un workable offer, for example 8 % redemption in the first three years, 7 % in yr4, 6% in yr 5 etc, and the rates where poor as well. I decided to go with another brokers option.

Several weeks later I now get a bill for £ 3000 from the orginal application company, a Disbursement invoice to cover their cost and lost profits !!. they have deducted the £ 800 quid on account ( which funny enough I was just about to ask for back ) and now served me with 7 days to pay the rest.

I have never paid a penny in tens yrs for a application. They have cited that because I signed the application, and that there very very small print say in point 11 they can claim all costs and lost profits if a application is susscessfull or not ??

I have gone baulistic at the broker for putting me in this situation, as he did not advise their may be costs, and he too is at a loss, as this is the first time he has seen this. he has spoken to the company and they want my money !!

Any advice before I speak to them tomorrow, may be finacial ombusman, trading standards ???


Its almost like this is a con.

You real in a potential client, get them to sign the standard application form and then offer them a product which is so bad they wont except, and then bill them 3 grand. Worst case if you dont pay they get 800 quid. Surely this is not aloud. There must be rules that fees are shown and explained upfront. And what about the broker. has he failed in his job towards me.



Any help please

Matt

Thrugelmir

mat1234 wrote: »

Hi I need some advice regarding a situation that has a risen. My work is property development and I have been doing this some ten years. I recently needed to finance a commercial property so put a couple of Brokers on the case to find the best deals. It was a unusual case and being commercial wasnt easy to find finance.

One of the brokers came a cross a morgage company who might be able to help. I had to fill out the pages of application form that they required and signed the forms which the Broker returned to the company. I also had to send a cheque for £ 800 for the valuation. Now I wasnt to sure about this , as at this stage there was no offer or any indication their could be. I questioned the fact I had never paid for a survey before an offer is made, but was told this was just the way this company operated. I still stated in ten yrs I had never needed to do this.

Time went pass and the company came back with a dreadfull un workable offer, for example 8 % redemption in the first three years, 7 % in yr4, 6% in yr 5 etc, and the rates where poor as well. I decided to go with another brokers option.

Several weeks later I now get a bill for £ 3000 from the orginal application company, a Disbursement invoice to cover their cost and lost profits !!. they have deducted the £ 800 quid on account ( which funny enough I was just about to ask for back ) and now served me with 7 days to pay the rest.

I have never paid a penny in tens yrs for a application. They have cited that because I signed the application, and that there very very small print say in point 11 they can claim all costs and lost profits if a application is susscessfull or not ??

I have gone baulistic at the broker for putting me in this situation, as he did not advise their may be costs, and he too is at a loss, as this is the first time he has seen this. he has spoken to the company and they want my money !!

Any advice before I speak to them tomorrow, may be finacial ombusman, trading standards ???


Its almost like this is a con.

You real in a potential client, get them to sign the standard application form and then offer them a product which is so bad they wont except, and then bill them 3 grand. Worst case if you dont pay they get 800 quid. Surely this is not aloud. There must be rules that fees are shown and explained upfront. And what about the broker. has he failed in his job towards me.



Any help please

Matt

This is commercial lending not personal. So same level of protection is not afforded. Consult a solicitor for advice. However I fear the worst as you signed the contract. Though the abortive fees claimed should be quantifiable as they may be a case for unreasonableness.

dunstonh

Any advice before I speak to them tomorrow, may be finacial ombusman, trading standards ???

Commercial borrowing like this is unregulated and contracts are arranged on a commercial basis (meaning you dont get the same consumer protections).

Thruglemir has really given you the option you should consider. However, one assumes you sought legal advice and/or financial advice on the transaction you were doing. Did you get the solicitor to review the contract before you signed it?

mat1234

Thanks for the reply

As far as I was aware i was just signing the application form, as I have done hundreds of times before when applying for morgages. As I mentioned this was only ever at application stage and not like I pulled out of a deal seconds before exchange.

Matt

dunstonh

As far as I was aware i was just signing the application form, as I have done hundreds of times before when applying for morgages.

It wasnt a residential mortgage but a commercial arrangement. Things are different with commercial lending.

ILW

mat1234 wrote: »

Thanks for the reply

As far as I was aware i was just signing the application form, as I have done hundreds of times before when applying for morgages. As I mentioned this was only ever at application stage and not like I pulled out of a deal seconds before exchange.

Matt

When you are in a commercial environment, playing with the sharks, never sign anything without getting it checked over.