Possible Mis Selling

Julie.fisher

This is my first post on this forum and it's a bit long winded and confusing so apologies first off.
My husband and I used a financial advisor to secure a mortgage for us earlier this year. He was able to find a deal that suited us and we went ahead. Everything was fine until we got the final bill from our solicitor and saw that is was substantially higher than expected. When we dug down into it, the mortgage provider had sent across less money than expected but at this point we had already exchanged contracts and had 4 days until we completed.
Maybe foolishly we thought part of the problem could have been the fees we were expecting to pay the adviser (£395) had been somehow deducted already but there was still a big shortfall. We were unable to get the adviser on the phone and he did not answer emails at this time.
To cut a long story short we paid the amount asked for and proceeded with the move. The day after we moved we received an email from the adviser asking us for the £395 to be paid to a bank account he had nominated in the email.
I emailed him back asking for a breakdown as things weren't as we agreed. Next thing we hear is an email from the company he worked for saying he had resigned and we got the impression there may have been fraudulent activity going on. After several chats with the owners of the company we discovered that the advisor had given us misleading information as in by us asking for fees to be added to the mortgage amount it pushed it over the 90% maximum the mortgage provider paid out. So we were in a robbing Peter to pay Paul scenario but this was never ever explained to us. Also the bank account he nominated turned out to be an account at was not affiliated with the business, Im just assuming it was his personal account.
Also while this was going on the advisor claimed he had secured us life insurance and told us were actively covered. This turned out not to be the case as a few days later I was informed that my policy had been declined and my husband's would be double the amount originally quoted.

So, after all of this my question is - is this misselling and where do we stand if the owners of the business decide to try and pursue us for the £395?

dunstonh

So, after all of this my question is - is this misselling and where do we stand if the owners of the business decide to try and pursue us for the £395?

No. it is not misselling. The mortgage has not been missold. However, there does appear to be a billing issue.

You should only pay what you agreed to pay in the agreement that you signed with the broker firm. no more. no less. If the fee agreement says £395 then that is enforceable.

You need to discuss this with the firm management as there are too many variables and potential issues here for us on a discussion site to really offer valid opinion. They will know the problems (if any) and they will decide what they need to do to resolve them (if any issues do exist that is).

ACG

I think it could be miss selling.
You applied for a Mortgage with a certain deposit and that is not what you ended up with and only found out at a point where it was lose-lose.

I would be very surprised if the brokers persue the fee under the circumstances. There has clearly been an issue and it is with a rogue broker rather than the firm itself. I would expect them to put it right.

dunstonh

I would be very surprised if the brokers persue the fee under the circumstances. There has clearly been an issue and it is with a rogue broker rather than the firm itself. I would expect them to put it right.

That was my thinking which is why I feel its best to keep communication open with the firm management rather than going all formal with a complaint at this stage. The firm management are more likely to want to get any issues resolved quickly and informally before having to invoke the full complaint process.

Julie.fisher

Thank for the comments, I really dont know what the firm management are thinking at this stage as there hasn't been a lot of communication. I dont really want to go down the complaints route I'd be happy to let it go if we can work on a deal with the fees. They have to understand that we have already paid out £800 more than we expected so in essence the £395 that was set aside at the start of the process has been spent, and we are stil £405 "out of pocket". If we had been given ALL the information it would have definitely had an impact on the decision we made in regard to which mortgage we signed up for, or given us the ability to scrape together the extra cash. Either way it wouldnt have just come as a nasty shock when it was too late to do anything about it.

dunstonh

If the firm management are not being forthcoming, then complaint may have to the option. Small firms tend to want to bend over backwards to avoid complaints. If the firm is not giving you that impression when they know there are issues then its not a good sign. However, a caveat to that could be that this ex member of staff has done the dirty on a number of people and the company is looking at all the things he did and that is taking the time. If that was the case though, then it wouldnt take a couple of sentences on the phone to you to make you aware of what they are doing

getmore4less

You need to find out where the money has gone if there was a shortfall on the lending.

You need itemised accounts from those involved, the solicitors completion statement should have most of the cashflow.

kingstreet

I suspect this was a 90% mortgage where the applicant believed the product fee was being added to the loan but this wasn't possible at that LTV. The product fee was then deducted from the advance, leaving the applicant to pay the fee ahead of completion.

Julie.fisher

Yes the amout that came across from the lender was less that the adviser told us it would have been as he neglected to inform us getting fees added to the loan was an utter waste of time as it pushed the total amount needed over the 90%

ACG

Have you thought about setting out a brief email, a quick paragraph to explain the issue(s). Then a breakdown of where you are out of pocket and then asking for them to credit you with that amount?

If you tell them the issue and what it will take to put it right/prevent it going further then it is very easy for them to say yes or no. Things like this frustrate me, I remember when I messed up once when I first started. I was skint and this mistake cost the clients about £400. I just told them I would give them the money back without them having to ask.

I never made the same mistake again, £400 and I learnt from it.