Mortgage broker fee

smnb08

Hi guys

Anyone able to help with this?

Have been using a broker to try and obtain a mortgage for my mum to obtain a small mortgage against her house which she owns fully in order to finish off building work.

Now, the mortgage hasn't been a straight forward application due to my mum being retired and also a couple of blips on her credit record five years ago.

Anyway I am waffling on.....the long and short of it is that we paid an upfront fee to said broker of £500, on checking before sending a cheque that we wouldn't lose that money should the application be declined we were told "it is refundable"

So the first and 2nd companies have declined and the broker said that we would have to get my mum to change the deeds on the house and sign it over to he three children so that we can apply for the mortgage and that is the only way around it due to my mums low income!

We certainly don't want this for my mum as her house is all she owns in the world.

My question is can we get the fee back from the broker? Do we have rights?!

Sorry for the lengthy post but wanted to get the full picture.

Any help muchly appreciated xx

Just adding that we have emailed, phoned etc but our messages are being ignored!

TBeckett100

Legally it depends on the wording of the terms of business

Morally, the broker has done the work to place applications for you and i doubt you would work for free.

capwhitt

Feel free to try another broker as well. Many don't charge a fee at all as they work on commission. As long as they are all of market too then you're set.

Getting the money back may be more trouble than its worth as if you do have rights, they are legal experts and will know every trick in the book.

smnb08

Well if it's to do with morals then why would the broker state that the fee is refundable?

Depends how u look at it I suppose, no I wouldn't work for free but then I wouldn't go promising people things I couldn't deliver and wasting their time...morals!

TBeckett100

If the broker was made aware of the credit issues then he has failed to research the case properly.

roje

Is that it? Has the broker not suggesting approaching any of the companies specialising in poor credit? I know their rates are higher but there might be other options to explore? Seems a bit irregular to say oh well, two lenders said no so it's unachievable. It's his job to find a way to make it work, I know there must be the odd case where it's unrealistic there will be any prospect of success but surely he'd know that from the outset if he was an experienced broker?

PixelPound

Were you told its refundable in writing or verbally? Even if in writing it depend on under what terms.
To be honest, I doubt you stand a good chance to get it back. If you are going for another broker then maybe as has been said a commission only one, else maybe one that charges on completion?

Brokers will vary, just like any industry professionals. Sometimes you have to go by gut feelings.

ACG

Morally the broker has said its refundable if he can not get mum a mortgage...he can not get mum a mortgage so you would expect that it is refunded.

I can only speak for myself but I charge on offer of a Mortgage, I feel this is fair as it means I do not take on a case unless I am confident I can place and ultimately clients come to to me for a mortgage, why should they pay if they do not get it?

Some brokers will say they do work and so should be paid but I feel charging on offer ensures my mind is focussed to get the offer and ensures I only take on cases I am confident with.

But I digress.... If the paperwork says its refundable then you should be fine. If the paperwork does not say that, then you need to prove you were told this.

I would personally write an email to say you advised if you could not get my mum a Mortgage you would refund the fee, please could you arrange for the fee to be refunded as you do not walk to change the owners on the land registry of the property because it will incur costs and is not what you wanted to do.

csgohan4

ACG wrote: »

Morally the broker has said its refundable if he can not get mum a mortgage...he can not get mum a mortgage so you would expect that it is refunded.

I can only speak for myself but I charge on offer of a Mortgage, I feel this is fair as it means I do not take on a case unless I am confident I can place and ultimately clients come to to me for a mortgage, why should they pay if they do not get it?

Some brokers will say they do work and so should be paid but I feel charging on offer ensures my mind is focussed to get the offer and ensures I only take on cases I am confident with.

But I digress.... If the paperwork says its refundable then you should be fine. If the paperwork does not say that, then you need to prove you were told this.

I would personally write an email to say you advised if you could not get my mum a Mortgage you would refund the fee, please could you arrange for the fee to be refunded as you do not walk to change the owners on the land registry of the property because it will incur costs and is not what you wanted to do.

I feel that is a fair way, but not all brokers operate that way, some charge half now and half on offer, some want it upfront. The issue is what happens when no offer comes or rejection.


One could argue no one works for free offer or no offer.


My Broker is great, offers no fee upfront and only pays on offer and is not lazy at all.


Compared to fee free where they stack their lists high to get enough commission ergo don't answer your calls or rather too busy taking on new cases, not updating e.t.c.

Let_Us_See

Forget conjecture and various moral opinions. Quite simply this would have been a regulated mortgage and the broker's Terms of Business (IDD - Initial Disclosure Document), including their fees and when payable, should have been presented to mother before any work commenced.

Therefore, either read these documents to determine when and if a fee is chargeable, or if they weren't presented, you have the broker over a barrel without a leg to stand on.

The fact the broker may have done some, or even a lot of work, is immaterial, as the initial conditions will apply. If documentation states the upfront fee (I'll never understand why people pay these) is refundable then you have a case, if it not, and just a verbal confirmation..........need I say more?

ACG

Totally agree that it may not go ahead and I could do loads of work but thats my fault for taking on a case I should have known not to. I know they will not all go to completion but I think in excess of 95% of the applications I do go to offer/complete. So yes there are times I do work and do not get paid but so be it, its all part of the job.

But as let us see says - there should be paperwork confirming that the fee is refundable if there is no offer.