KFI failed to include Higher Lending Charge

lh123_2

We recently applied for a mortgage through a broker and were given the Key Facts Illustration which we were happy with. When I got the actual mortgage offer through (after paying the booking and valuation fees) I found they are charging us a Higher Lending Charge of over £900 which was not specified in the KFI.

Our broker spoke to the lender and they blame the broker's sourcing (which produces the KFI). Their sourcing people blame the lender. No-one will take responsibility for it and the lender simply says to pay it or they won't give us the mortgage.

The broker has checked other options and found we are still getting the best deal even after we add on this extra fee (both at the time of the original search and today), but it seems terribly unfair that they can get away with this. Everyone just says that 'the KFI isn't legally binding'. But then what's the point of it?!

Does anyone have any suggestions on anything we can do about it?

poppy10_2

lh123 wrote: »

Everyone just says that 'the KFI isn't legally binding'. But then what's the point of it?!

Does anyone have any suggestions on anything we can do about it?

You can't do anything about it. As you have already discovered, the Key Facts Illustration is not a legally binding document, and does not oblige the mortgage lender to provide you with the mortgage described in the illustration. Your only choices are to agree to the charge or walk away.

Conrad

Technically the Broker is at fault as he cannot 'rely' on dumb software which is what all sourcing systems are, as they are the sum of an interaction between the software and lender staff so there are always errors and this should come as no surprise to any broker. Under the FSA's 6 core principles (known as TCF Outcomes), Outcome 3 states > 'Consumers are provided with CLEAR information'.

Brokers also self declare to the FSA that ALL systems have been stress tested and that the systems are FULLY capable of delivering the 6 core outcomes.
So in reality this would mean the broker should have DOUBLE CHECKED the product, regardless of what a dumb sourcing system says.

At my own firm we have a checklist, which includes 'Check the features of the product again'. This is us delivering on outcome 3 and what all brokers must do.

I can't guarantee you would be compensated but it's worth a go.

dunstonh

There is form with things like this. The bottom line is that the adviser is responsible for making sure the information is correct. Research software by itself is not enough. Due diligence lies with the adviser. The FOS deal with complaints all the time where the provider or third party has given incorrect information but the outcome nearly every time is that you are paying the adviser and the adviser has the liability.

magpiecottage

dunstonh wrote: »

There is form with things like this. The bottom line is that the adviser is responsible for making sure the information is correct. Research software by itself is not enough. Due diligence lies with the adviser. The FOS deal with complaints all the time where the provider or third party has given incorrect information but the outcome nearly every time is that you are paying the adviser and the adviser has the liability.

Except, of course, if the lender's valuation is lower than the borrower told the adviser. If that is the case, the loan to value ratio would be different and the rate may be higher or other charges incurred.

That is not the adviser's fault.

JQ.

I don't really understand the issue.

If it made the mortgage you'd been offered became uncompetitive after to error was noticed and you went with another mortgage provider then you'd be wanting your money back - which is understandable. However, the mortgage you're being offered is still the cheapest so you'd stilo have had to pay that extra money anyway. So you're not actually out of pocket, it's just your expectations have been poorly managed.

I'd just move on and get the mortgage sorted.