Broker trying to rip me off.

access122

Hi all. I recently used a broker to secure a mortgage with a reputable nationally recognised bank..(Northern Rock) I have a good credit rating and have been pleased with his help. His inital illustration showed he would get approx £800 commission from the bank, and he also told me he needed a £95 admin fee. So far so good, but now, just days away from completion he informs me of an additional charge of 1.5 % of the mortgage amount. This works out at £2200 and theres no way i intend to pay, since i was never made aware of it and it is an astronomical amount. I havent signed the form agreeing to pay it yet but obviously want my mortgage application to proceed. I would consider paying him a much smaller amount, maybe, but feel he has been dishonest.Can i tell him i am not paying and contact the bank directly to proceed?

jyonda

Is the 1.5% for the broker or for Northern Rock? Many lenders charge a very high arrangement fee so they can advertise low interest rates. Did your broker inform you of any arrangement fees? Are they FSA registered?

AndrewSmith

Check the origianl quote you were offered by the broker firm. It will outline all the costs and charges invlved with this particular mortgage.

Also you should have been issued with an Initial Disclosure Document or Key Facts About Our Service document which will show all fees payable to the 'broker' for advice.

They will be FSA registered, we all have to be these days to transact residential mortgages.

access122

Hi. Thanks for your replies. No i never got any paperwork or documentation apart from a mortgage illustration showing everything including "fees payable by you"..It showed his commision form Northern Rock and my other costs..like valuation fee and what they would pay him. I read it carefully and until now his only mention of any other charges was his own £95 admin fee. The 1.5% is not for Northern Rock, the form he sent me explicitly says its an agreement between me the client and him personally. He definitely did make no mention of this other fee, and im not surprised as i would have run a mile. Can i contact Northern Rock directly to proceed or advise him unless he drops or massively reduces his additional fee i wont go through with him..?

His email says at the bottom the following...(name of company) is a trading name of (name of company) Consultants, which is an appointed representative of the following companies, which are authorised and regulated by the Financial Services Authority for advising on and arranging the products shown: Legal & General Partnership Services Limited (mortgages and insurance), Legal & General Assurance Society Limited (life assurance, pensions and investments), Legal & General (Unit Trust Managers) Limited and Legal & General (Portfolio Management Services) Limited (investments).

dunstonh

Fee agreements have to be issued up front and agreed to have any legal standing to force you to pay. The Intial disclosure documents have also got to be accurate on this front as well.

You have seen a tied rep for Legal & General and you can make a complaint to their compliance department. However, before you do that, ask the broker for a copy of the signed fee agreement and Initial disclosure documents that should have been supplied to you right at the start.

Whilst not wanting to judge any one individual, L&G are one of the 12 companies that accounts for the majority of complaints going to the FOS.

ctabuk

That has to be on the KFI - He's goofed -juglar time.

AndrewSmith

If you have received no Initial Disclosure Document relating to the 1.5% broker fee, and if it is not shown on the Northern Rock quote then simply you do not pay it. Even though the quote is in relation to a Northern Rock mortgage the broker should include on the quote his own fees or charges as part of the overall advice cost, this should be listed within the fees section of the quote (section 8).

Challenge the broker about this and, if he will not back down, tell him you wish to escalate the complaint via his/her complaints proceedure. As an appointed representative of legal & General a complaint such as this will be handled by their complaints process.

access122

Thanks for your advice. I will ask him to drop the charge, or maybe ill pay him a reduced fee, but in the meantime is there anything to stop me from ringing Northern Rock and telling them to go ahead with my mortgage and to deal with me directly?

AndrewSmith

They will want you to start again from scratch with them and re-submit the full application on a rate from their current range.

It is not possible to continue a broker submitted case without the broker.

Andy

nrsql

>> I will ask him to drop the charge, or maybe ill pay him a reduced fee
Why do you want to carry on having dealings with this broker?

access122

Well the answer to that is the same reason that he has only just now informed me of the fee; because i am up to the wire financially, he knows it and is probably counting on me being desperate enough to just pay it and be done. Another four to six weeks is a long time to wait..