mortgage broker charging me after deciding to not use him

scotsbhoy1

Basically a week ago i decided the mortgage broker i was using wasnt finding the best deals for me so i decided to get a mortgage myself.i never signed a thing but on a discussion on the phone the broker told me part of the mortgage application was a 250 broker fee which i understand.the broker got me a mortgage promise with halifax two weeks ago (in scotland btw) but when he told me the deal they were offering and i decided not to procceed but i did recieve the paperwork i had to sign to proceed with the application.i have recieved a letter from the broker today basically giving me an invoice for £250 saying that even though the application is no longer proceeding i owe them the money for the work done.on the keyfacts document they provided it says under fees that a fixed fee of £250 is payable on receipt of the mortgage application along with a fee paid by the lender,however i never went ahead with the application therefor did not recieve a receipt so am i still liable to pay the £250 fee?

kingstreet

scotsbhoy1 wrote: »

a fixed fee of £250 is payable on receipt of the mortgage application

By whom?

ACG

An application was made though?

If you havnt signed anything then it would be hard to prove anything.

That being said, their documents clearly stated when a fee would apply (they all follow the same layout) and they got to that point. They have done what you requested and must have agreed to otherwise you would have said something at the point of seeing/reading the document.

kingstreet

The borrower appears to have decided not to proceed after the provision of an agreement in principle and before the "receipt" of a mortgage application by anyone but the borrower.

I would interpret the word "receipt" as indicating receipt by the broker or the lender of a fully completed, signed application, not receipt by the borrower of forms needing completion and or signature.

Assuming the first key facts illustration you received arrived with these application forms, this is the first opportunity you have had to decide the terms of the offer do not match your needs and to decide not to proceed with an application.

scotsbhoy1

kingstreet wrote: »

By whom?

By me the borrower

An application was made though?

No for an actual mortgage application to be made i would have to send a copy of my latest payslip ,which i didnt and no credit check was done on me by halifax.

I would interpret the word "receipt" as indicating receipt by the broker or the lender of a fully completed, signed application, not receipt by the borrower of forms needing completion and or signature.

Assuming the first key facts illustration you received arrived with these application forms, this is the first opportunity you have had to decide the terms of the offer do not match your needs and to decide not to proceed with an application.

Correct i received the key facts allong with the mortgage deal they where offering i had a few documents i had to sign and send back along with a copy of my latest pay slip.i did not sign anything or send a copy of my payslip.i heard what the mortgage halifax were offering via the phone but this was rhe first time i had seen the numbers on paper,which also revealed that the fees halifax wanted for said mortgage was considerably more than the broker said it was.all the broker knows is my annual income,my bank and my account number and sort code for credit check purposes.is the broker just trying his luck since he knows im a ftb?

ACG

An application can be made prioer to receiving payslips...it shouldnt be but its possible and they can then be forwarded on at a later date.

However, you have received a KFI which is just informing you which deal they are advising you to take out. If no application has been made, and the document they gave you clearly says £250 is due on application i would say you are probably safe to tell them to take a running jump.

kingstreet

scotsbhoy1 wrote: »

By me the borrower

I've just realised what I asked was ambiguous. I was putting doubt on the wording of the intermediary's claim and my "by whom" should have said "receipt by whom?" rather than the way I believe you interpreted it as "paid by whom?"

I would suggest you write back to the intermediary, sending recorded and taking a copy along the lines of;-

I was made aware of your fee requirements by telephone and understood a fee would be payable should I decide not to proceed following "receipt" of an application.

Having studied the key facts illustration for the recommended offer I believe it differed in some respects from what I was told verbally. I therefore decided not to proceed at that stage, prior to completion or submission of any application.

I therefore believe I withdrew at a point before I committed myself to the payment of any fee to you or any other party and would assert this in a complaint to the Financial Ombudsman Service, should the need arise.

See what some of the others think before you send anything, but it looks like a try-on to me.

scotsbhoy1

ok so i read the document clearly after work and made sure i have not applied for this mortgage and i havent.a document titled 'about this mortgage' states that:
' this (document) is not a legally binding mortgage offer and it does not oblige halifax to provide you with the mortgage described in this illustration'.
After reading the key facts document on the brokers section about fees it says:
'a fixed fee of £250 is payable on receipt of the mortgage application along with commision paid by the lender'
and under that, under the heading 'refund of fees' it states:
'if we charge you a fee,and your mortgage does not go ahead, you will receive no refund under any circumstance'.
However they had not charged me a fee before i decided to not continue with the application and the keyfacts clearly states the fee is only is only payable on receipt* of the mortgage application and i have not applied for the mortgage so i must not owe them anything surely?. am i missing something here or are they just hoping i pay it and dont ask questions?

Thanks for all the great help guys






*A receipt is a written acknowledgment that a specified article or sum of money has been received. A receipt records the purchase of goods or service obtained in an exchange

ACG

If thats the case i would say you are safe. Write them a letter explaining that and you consider the matter closed. If they send you anymore requests then you would be happy to refer the matter to the financial ombudsman to judicate....word it better than that but thats the general gist i would go with.

dunstonh

If you employ someone on fee basis then they have a right to be paid. However, if they are foolish enough to put in their terms of business that the fee is on application and no application has taken place then they have no grounds to request the money.

The adviser, if they have any sense, will back down if you tell them you consider the matter closed and make it clear you would go to the FOS if he decides to pursue it. FOS charge the adviser £500 even if the complaint is rejected. So, there is little point him arguing over £250 if it is going to cost him £500.

chewback

[ FOS charge the adviser £500 even if the complaint is rejected. So, there is little point him arguing over £250 if it is going to cost him £500.[/QUOTE]

That sounds fair!!! So I can just threaten any IFA with this is his fee is less than £500????