Reclaiming valuation fee?

LizEstelle

A work colleague is up in arms because a remortgage fell through.

The first lender proposed by her broker asked for all kinds of documentation (she is doing a self-certification mortgage!) and then, apparently satisfied with this, proceeded with a valuation for which they charged her over £300. This was apparently also satisfactory. A week went past during which there was a thundering silence ... and then they asked for documentary proof from her current lender of the level she would be paying if she were to stay with them! This was at least two to three weeks after the original paperwork scrutiny.

The current lender said this could be arranged but it would take between 5 - 10 working days before the document could be 'generated' - thus stretching matters out even further and bringing her perilously close to the end of her tied period when her rate would indeed jump by several hundred pounds/month to the lender's SVR.

Both my colleague and her broker were horrifed with this situation; the broker switched her to a different company and this time the application just zoomed through without problem.

Does my colleague have grounds for requesting the refund of the valuation fee from lender #1 or perhaps complaint to the FSA or suchlike?

Robert_Sterling

I think that they ought not to have had a valuation before they had collected all other relevant information.

LizEstelle

As far as I know, it was the lender's valuer, attending when they saw fit.

It does seem very unfair. Yes it was my colleague who withdrew from the process but this was done under time pressure to get some deal done before her current lender's rate went sky high. She had started in plenty of time (nearly two months) and they messed her about terribly.

Cara79

Well the best thing to do is put a complaint into the lender and see what happens. You would have to follow their complaints procedure.

The other thing is, the broker could contact the lender to see if anything can be done, although I suspect it will be out of the broker's hands.

Conrad

A claim would only suceed if the Broker can be shown to have not treated the client fairly having due regard for the clients needs and lender criteria.

The lender will not be liable. In the small print it always states applications are subject to full underwriting.

In any event despite the application being on a self - cert basis, this does not mean lenders should lend irresponsibly should they have suspiscions. If the client had nothing to hide then they should have been able to easily satisfy the lenders underwriting procedures.
Clients love sueing lenders for lending irresponsibly, yet they also complain when lenders underwrite thoroughly in order to LEND RESPONSIBLY, AHHHHHHHHHHHHHHHHHH

LizEstelle

Conrad wrote:

A claim would only suceed if the Broker can be shown to have not treated the client fairly having due regard for the clients needs and lender criteria.

The lender will not be liable. In the small print it always states applications are subject to full underwriting.

In any event despite the application being on a self - cert basis, this does not mean lenders should lend irresponsibly should they have suspiscions. If the client had nothing to hide then they should have been able to easily satisfy the lenders underwriting procedures.
Clients love sueing lenders for lending irresponsibly, yet they also complain when lenders underwrite thoroughly in order to LEND RESPONSIBLY, AHHHHHHHHHHHHHHHHHH

Thanks for the opinion.

I think you may be missing the point inasmuch as it seems my friend was apparently led to believe that scrutiny of status had (successfully) concluded and the potential lender was now moving to the next stage - property valuation - which would require a non-refundable payment. It was only AFTER this stage (itself successful), with my colleague believing that there was nothing now preventing the lender from making their official 'offer', that they made a further demand out of the blue for documentation (see my initial post).

The broker, with whom my colleague had no issues, was apparently furious with the lender for this behaviour and, in view of the time then still likely to elapse, recommended an immediate abandonment of the application in favour of a different lender. The survey fee was lost.

I'm not an expert but this does strike me as both a profoundly callous and unprofessional way for any company to treat potential customers. £300+ is not chicken feed.

herbiesjp

You say" and then they asked for documentary proof from her current lender of the level she would be paying if she were to stay with them"

So they wanted something in writing from the current lender, to confirm what the payments would have gone up on to on the SVR rate, is that correct?

Did your friend not have a letter from her current lender indicating the impending change to SVR and the new figures? Especially as the SVR rate was so close, they would need to notify of the change of amount to your direct debit.

This letter could have been faxed across in 5 minutes, and the problem solved.

Personally I think this would have been a quicker solution than submitting a new application, having another valuation done etc

Then again it is difficult to convey all the details on a board like this

Hope it all goes well either way.

LizEstelle

herbiesjp wrote:

You say" and then they asked for documentary proof from her current lender of the level she would be paying if she were to stay with them"

So they wanted something in writing from the current lender, to confirm what the payments would have gone up on to on the SVR rate, is that correct?

Did your friend not have a letter from her current lender indicating the impending change to SVR and the new figures? Especially as the SVR rate was so close, they would need to notify of the change of amount to your direct debit.

This letter could have been faxed across in 5 minutes, and the problem solved.

Personally I think this would have been a quicker solution than submitting a new application, having another valuation done etc

Then again it is difficult to convey all the details on a board like this

Hope it all goes well either way.

Yes, that is correct. Personally, I don't quite understand how this information would possibly affect matters one way or another... surely the 'jump' to a current lender's SVR is very commonly the reason for remortgaging, no? Why would this confirmation be needed? My friend tells me her broker also had difficulty in understanding what was going on here and suspected the new lender of some kind of strange agenda.

She tells me that her current lender was willing only to transmit the information directly to her and not to a third party - and since she had no fax this would have to be in the form of a snailmail letter which would require 5-10 working days to be raised by the 'appropriate department'.

I'm getting all this second hand but have no reason to doubt what she's telling me.

Her mortgage with the second 'new lender' went through in two weeks flat.

cordial

Sounds pretty offhand treatment to me. Likewise, I can't understand why a new lender would want to have written confirmation from the current lender that your friend WAS about to go up onto their SVR. Weird. Can any broker here give an answer on that one?

Did she have anything in writing from the new lender which indicated the phase of "status checks" (which in any case seems a contradiction in terms with a "self-certification" mortgage!) was over??

herbiesjp

cordial wrote:

Sounds pretty offhand treatment to me. Likewise, I can't understand why a new lender would want to have written confirmation from the current lender that your friend WAS about to go up onto their SVR. Weird. Can any broker here give an answer on that one?

Did she have anything in writing from the new lender which indicated the phase of "status checks" (which in any case seems a contradiction in terms with a "self-certification" mortgage!) was over??

A lender is quite within its rights to ask for any information it deems necessary for a mortgage application - each lender will be different in its requirements and it will differ on a case by case basis sometimes.

Self cert means that they will not normally require proof of income - however, if they want they can ask for proof of income.

Asking for this confirmation has nothing to do really with the self cert status, as it is not requesting for proof of income.

The lender should be able to answer why it requested that information

HTH

cordial

herbiesjp wrote:

A lender is quite within its rights to ask for any information it deems necessary for a mortgage application - each lender will be different in its requirements and it will differ on a case by case basis sometimes.

Self cert means that they will not normally require proof of income - however, if they want they can ask for proof of income.

Asking for this confirmation has nothing to do really with the self cert status, as it is not requesting for proof of income.

The lender should be able to answer why it requested that information

HTH

Fine, but that doesn't really answer the question, does it? WHY would a potential lender, weeks after seemingly asking what questions it wanted to ask and the valuation having been done at the potential borrower's expense, suddenly want confirmation from the current lender that the borrower is about to go up onto its SVR?

Doesn't seem to make any sense... unless it was deliberately seeking to obstruct the deal it had offered for some reason.

Also, on the second and non-relevant question raised - if, when someone applies for a self-cert mortgage (which is almost always at a higher interest rate level than a lender's other deals) they find they ARE being asked for proofs of income by that lender, can they then insist that the lender applies their lower, income-diclosed rate to the product???