Rogue Mortgage Broker

Occident

It was Northern Rock Together. My friend had a deposit and has an above average income - she was not a sub prime customer and has an excellent credit rating. She didn't need or ask for a 100% mortgage. But the mortgage itself is only part of the misselling. She was only offered one mortgage, was given no IDD, KFI or Letter of Recommendation - all the broker handed her was his business card. She didn't know he wanted a fee until the day before the mortgage was drawn down. He broke every rule in the book in arranging this mortgage - the claim form she has sent to FSCS is full of what should have happened and didn't. Four months later he was out of business. He knew he was going when he brokered the mortgage and any kind of attention to rules had already gone out the window because he didn't care and wasn't being supervised (he was not authorised in his own right and the authorised person was his wife, who vamoosed with him. Her authority was withdrawn at the time they moved). He is now under investigation by the FSA.

I am grateful for your comments - thank you.

Occident

I should add that she had other commitments but didn't need to consolidate - they were more than affordable plus a mortgage - and she didn't need funds over and above the mortgage. So I guess that blows any reasons for the Together mortgage out of the water. This guy had some cheek. After he moved he phoned my friend and said he was working for a claims company and they could check if her mortgage had been mis-sold, saying Northern Rock were one of the worst!! I will not repeat her reply!

kingstreet

As you say, there appears to be no reason for the recommendation of a Northern Rock Together product. I've just had a look back at the procuration fee Northern Rock was paying on Together deals back in 2006/7. It was 0.5%.

It's fair to say this was more than a Halifax or Abbey product, but still a lot lower than would have been paid to the broker if a sub-prime deal had been recommended, where typically around 1.25% could be paid.

Thrugelmir

Occident wrote: »

I should add that she had other commitments but didn't need to consolidate - they were more than affordable plus a mortgage - and she didn't need funds over and above the mortgage.

Then once the mortgage was in place. Then she would have been in a position to overpay the mortgage. As the effect of consolidating existing debt would have reduced her outgoings. Not least as interest charges would have been far lower.

If she did not. Then it was her choice not to do so.

The attraction of refinacing debt onto a lower rate of interest is obvious So this argumentholds little substance in verbal form alone.

Thrugelmir

An afterthought.

You should base your arguments on the fees she was charged and additional costs that were wrapped up into the new mortgage.

Negative equity for example was not caused by the debt consolidation directly.

Occident

Yes Thruglemire, that is one of the arguments she made in her claim. We will just have to wait and see what they come up with but I wanted the opinions of others. Thank you both.

Occident

Getting nowhere fast. My friend got a letter from the FSCS giving her the details of the network that the broker worked under and advising her to apply for compensation to their principal. Wrong information. That network was authorised as an insurance network only and if the FSCS had done their homework properly and had checked with the FSA they would have been told that. They were not authorised as a mortgage network. Back to the drawing board. So far neither Northern Rock, the FSCS or the FSA has been able to tell my friend who the broker's principal was.

GMS

If a mortgage was arranged through a broker for Northern Rock then they will know exactly who it was.

Which network was it? Understand if you do not want to state in a forum but you may wish to approach directly.

Occident

I know about the network and it was a network for the broker's insurance sales only - it was not an Appointed Representative network authorised by the FSA for mortgages. It went out of business shortly after the broker but it's principal is a national insurance company. My friend tried last year to get the FSA number the broker used in her application and Northern Rock couldn't give her it. They gave her 3 numbers that were wrong. When she told them this, they said they had the number but it was not in a form that could bee seen by the customer. The FSCS have been informed of this and were informed of it last year. To spend 2 months considering a new claim, which they instigated, then come up with wrong information is a farce. They clearly didn't check it before they replied to my friend. She is certainly getting the run around from the FSA, the FSCS and Northern Rock - none of them can tell her who this guy's principal was. She was advised by the FSA to go to the ICO and ask for them to order Northern Rock to release the number under the Freedom of Information Act. She spoke to the ICO and was told the number may be part of an agreement between the broker and Northern Rock but not between Northern Rock and the customer. She has written again to Northern Rock and asked them to give her the number or she will go to the FOS. They also only gave her 1 page of the application form and she has asked for the rest of it. The system is supposed to uphold consumer confidence and in my friend's case it has failed completely.