mortgage refused, cannot get fee back

btcp

guys, any advice would be welcome.

we applied for a mortgage through a broker, he took the product and application fee at the time of the application, in KFI it says about the fee: Payable on application, refundable if lender declines or restricts the loan to value.

the lender declined the mortgage application, and now I am trying to get the money back from the broker. it has been 2 months since I've started to do so, and they just dragging the process without communicating clearly when I can get my money back. They said they need to get a refund from the lender first, then will be able to refund me but the lender does not give them a certain date, therefore they cannot commit to any dates themselves. There should be some reasonable timeline, however, right? How long does it usually take to refund? and if I am not satisfied with the timeline can I take it further somewhere - small claim court, FSA?

Thanks a lot!

harvey115

If the money was taken from your account by the Broker (intermediary) and not the lender directly then I would assume the broker should do this refund as early as possible. Otherwise you would need to wait for the bank to refund or you may call the lender regarding your application fees and they may quickly do the necessary refunds.

btcp

the money was paid to the broker directly, and I understand I am in contract with him not the lender. this is just an excuse of them saying that they need to get the fee back from the lender in order to refund me. I am clear that the broker should do the refund, the question is what is the reasonable waiting time and if I feel that the wait is too long or suspect that he may not want to refund at all, who do I go to with my complaint?

kingstreet

Make a formal written complaint to the broker requesting the return of your payment. Send it signed-for, or special delivery. The broker will have eight weeks to answer your complaint to your satisfaction. If he fails to do so, you have the right to escalate the matter to the Financial Ombudsman Service (FOS) for resolution.

GMS

btcp wrote: »

the money was paid to the broker directly, and I understand I am in contract with him not the lender. this is just an excuse of them saying that they need to get the fee back from the lender in order to refund me. I am clear that the broker should do the refund, the question is what is the reasonable waiting time and if I feel that the wait is too long or suspect that he may not want to refund at all, who do I go to with my complaint?

Any payment for arrangement or valuation fees should be paid to the lender directly. You need to check if the broker has permission to 'hold client money'.

Check on the FSA register http://www.fsa.gov.uk/register/home.do for permissions.

Doesn't sound right to me.

btcp

kingstreet wrote: »

Make a formal written complaint to the broker requesting the return of your payment. Send it signed-for, or special delivery. The broker will have eight weeks to answer your complaint to your satisfaction. If he fails to do so, you have the right to escalate the matter to the Financial Ombudsman Service (FOS) for resolution.

thanks for advice. does email count as a formal complaint or a paper letter is better? they acknowledge they've received my email where I request the refund, and we talked on the phone a few times too after that.

kingstreet

They should have treated your email as a complaint, but I bet they haven't. Did they send you details of their complaints scheme and a letter explaining your rights and how your complaint would be handled in response? The answer is fairly obvious, as if they had, you wouldn't be asking the questions you are.

I suggest sending another email, stating you now wish the matter to be treated as a formal complaint with the usual timescales applied and that you understand your right to escalate to FOS if a satisfactory solution is not found quickly.

Following on from what GMS said, you could also scare them by asking for a copy of their permissions to handle client money. It's likely that have no such right and they will realise you mean business.

btcp

kingstreet wrote: »

I suggest sending another email, stating you now wish the matter to be treated as a formal complaint with the usual timescales applied and that you understand your right to escalate to FOS if a satisfactory solution is not found quickly.

Following on from what GMS said, you could also scare them by asking for a copy of their permissions to handle client money. It's likely that have no such right and they will realise you mean business.

I should of register on this forum earlier, thanks a lot it absolutely makes sense to me now. I'll follow the recommendations and see what happens!

Dave_Ham

Firstly lets determine what you have paid.

If you paid this to the broker, lets assume it was a broker fee. As you have said it is refundable stick with this and you need to kick up a fuss, formalising it with a letter will start this process.

Imagine we are talking about £250-£500 and my friends at the local Estate Agency...?

Look at your IDD which they had to have provided and check it states refundable if no mortgage offer and go from there.

Do not let them keep hanging this out - good luck

btcp

GMS wrote: »

Any payment for arrangement or valuation fees should be paid to the lender directly. You need to check if the broker has permission to 'hold client money'.

Check on the FSA register for permissions.

Doesn't sound right to me.

the Permission section is empty, looks like they don't have this one...
is there a difference of what the payment for? It called Booking fee in the invoice, and fee for arranging the mortgage in the KFI.

Conrad

I don't think they nwill be paying you back. There is no money to come back from a lender, this is just a line to keep you off thier case.

You paid the broker a processing fee. They want to keep it. Refer to the Key Facts (about our service) and also to any KFI illustration to see what you agreed to fee wise.

Usually if you threaten to involve the FOS and FSA they will refund.