Hidden Mortgage Fees Scam - Yorkshire Building Society

andrewsales

I'm currently arranging a mortgage with YBS and therefore forced to use one of their "panel" conveyancing firms.

It turns out that all of the quotes are at least £500 more expensive than a random quote from a local solicitor. "Too time consuming for him to get on the panel" they advised.

It further turns out that in the text of my acceptance letter from the cheapest of the panel solicitors, there is mention of a referral fee of over £400, presumably paid to the lender!

"Don't worry you don't have to pay that - we do" says the solicitors. Right, so that has nothing to do with your quote being £500 more than reasonable competition, with almost double the main legal fee.

This is outrageous and nothing more than a hidden mortgage set up fee.

YBS (and presumably other lenders) are not content with hiding their costs in setup fees to reduce their headline interest rates.

Now that tools like MSEs mortgage best buy calculator allow up front fees to be easily taken in account, they get to the top of the tables with more underhand tactics. Shift fees into a forced hugely inflated conveyancing cost, which they harvest via "referral fees". The law society has argued for a universal ban on such fees and I agree with them.

Any similar experiences or advice to offer? Is there a way to use an independent solicitor on their panel without incurring the fee?

Thanks for reading.

marksoton

So it's not hidden at all then.

Find another lender.

booksurr

post on a more relevant board :idea:.... I suggest the one about mortgages http://forums.moneysavingexpert.com/forumdisplay.php?f=15

andrewsales

OK - I'll move it there.

It is a hidden fee (marksoton) because it is only revealed to be a further cost charged by the lender after the point you have paid money to the lender. At the point of commitment with the lender they do not explain that you will be restricted to a panel of conveyancers whose costs have been inflated by over £400.

HouseBuyer77

All lenders have a panel. Some of the work the solicitor does is for the lender so they will only accept solicitors that are on their panel. However they normally have a large number of solicitors on so it shouldn't be hard to find one on their panel.

I have a mortgage with Norwich and Peterborough which I believe is basically just another brand for YBS. I had no such issues (first solicitor I got a quote from wasn't on the panel and advised that they could be added to the panel but it can take a while and could jepordise the sale. second solicitor was on the panel and was the one I used). There were no referral fees.

HouseBuyer77

I think if you really want a non-panel solicitor you can in fact engage two, one to act for you and one to act for the bank.

Have you rung every local solicitor and asked if they're on the YBS panel? I find the £500 difference in quotes surprising. From my experience the cheapest quotes I got (which were from online conveyancy factory type places) were £300-£400 cheaper than the most expensive. Plus the cheaps quotes tend to have many hidden fees of their own.

andrewsales

Thanks everyone for the replies - I've copied the post to the Mortgage forum should anyone want to continue (sorry not allowed to post links).

HB77 - are you sure you read the small print - the referral fee is not in the fee breakdown they give you - just mentioned in the text and paid for by inflating all those fees in the breakdown.

I have some more ringing around to do. The list of quotes from the YBS site for their panel solicitors range up to £930 more expensive than my local one!

HouseBuyer77

HB77 - are you sure you read the small print - the referral fee is not in the fee breakdown they give you - just mentioned in the text and paid for by inflating all those fees in the breakdown.

Just had a look at the original quote they sent me. There is no small print. They just quoted £875 for their fees plus all of the other stuff on top of that (searches, land registry fees, transfers fees etc). It's on the high end of solicitors fees but this one came highly recommened. I was very happy with the service provided. I phoned her independently for a quote (not a referal from the bank), I may not have even mentioned my lender at this point.

What does your fee breakdown say?

LJS2014

We took out a mortgage with Yorkshire Building Society last year and found the same thing with their panel. (We already had a solicitor but inconveniently they had been removed from the YBS panel a few weeks prior :mad: our sol at the time advised it could take them a couple of months to get back on it and to pick someone from the list YBS gave us to make life easier.)

We contacted a solicitor on their panel for a quote which was a couple of hundred pounds less than that stated on the YBS paperwork for the same solicitor. We appointed the solicitor directly and saved the extra cash. :T

andrewsales

Thank you - that's great to hear and what I was hoping for - i.e. reduced costs if you contact a panel solicitor directly rather than through the YBS quote system.

This really is a hidden cost that is in no way disclosed from their conveyancing portal or from their "customers' interests" advisors.

HB77 - thanks - I think the regulations making them disclose the existence of a referral fee kickback is quite recent - possibly predating your conveyancing? If it was present it would have been covered by that legal fee, just as mine appear to be.