WARNING - HSBC ot refunding unsucessful mortgage application product fee

PaulCarpenter

Beware if making online mortgage application with HSBC - See how they treat young vulnerable first time buyers!

On 14th June 2020 my son and his partner made an online application for a mortgage.  Part of the process involved paying a £999 fee to guarantee the rate being offered that day.  They paid the fee and continued with the application.  Within 10 minutes the application had been rejected – without a reason given.  They assumed the £999 would not be taken or, if it had, be automatically refunded that day.

 On 15th June they rang Customer Services the next morning as the money had been taken from the account and was told the payment would be automatically refunded with 3-5 working days (by 19th June)

 On 26th June at 12 noon they rang again as the money had not been refunded.  His partner was told that as my son was the 1st named applicant, they couldn’t talk to her and that refunds had to be requested – despite the operator on 15th June not raising that issue.  At 6pm that day my son rang Customer Services requesting the refund and was told it would be refunded within 3-5 working days (by 3rd July)

 On 6th July the money had not arrived. he rang at 8am and was told there was no reason why the money wouldn’t be automatically refunded and it would be with us with 3-5 working days.

 As at 4pm on 9th July the money has still not arrived.

 They are first-time buyers with limited funds.  They need that £999 to pay fees and costs associated with the purchase of our first home.  It is unfair that a multi-billion organisation is refusing to refund their money.  They feel the £999 was tricked out of them by the way in which the online process was presented.

Posted as a WARNING

[Deleted User]

Yeah they never have done.  They call it a booking fee to reserve the funds so claim it did its job even if it doesn't go through.   You might get a refund if you keep pushing though. 
Santander used to do the same but they changed over a while ago. 

I just tell most people to add the fee to the loan then pay it within 14 days of the mortgage starting to avoid interest on it 

yksi

You said costs associated with the purchase of OUR first home? And that the money will be with US within 3-5 working days? Whose money is it and was the application unsuccessful because something was questionable about who owned the money, or could that be holding up the refund?

PaulCarpenter

yksi - sorry, my bad grammar.  Its their money and it for their home.  No-one elses.  They paid the money to 'guarantee' the rate being offered and then by the end of the application process (about 5 minutes) the online application was rejected due to not earning enough money.  They received no value for the payment and HSBC have no right to retain it.  The issue is HSBC have terrible customer service and keep telling the young ones anything to get them off the phone.  Its disgusting!

dunstonh

So, they are not refunding a non-refundable fee.    Why is that a surprise to you?
They are not alone which is why mortgage brokers will often tell you to add the fee to the mortgage and then repay it when advanced rather than pay the fee up front.      Then if the mortgage does not proceed, you do not have to pay the fee.

Thrugelmir

PaulCarpenter said:

  They paid the money to 'guarantee' the rate being offered and then by the end of the application process (about 5 minutes) the online application was rejected due to not earning enough money.  

Who advised them to apply to HSBC? 

PaulCarpenter

dunstonh - why do you say its a non-refundable fee?  It was an option during the initial online application process.  It said pay £1000 and guarentee the rate or proceed to next part of the online process.  5 minutes later (apparently due to my son's salary not being sufficient) they were rejected.  HSBC have not provided anything for £1000.  No value in exchange - they had the money for 5 minutes before rejecting them.  Now 5 weeks later after being promised return its still not returned.  I am trying to warn other vulnerable people not to fall for same trick.  

PaulCarpenter

Thrugelmir - No-one advised them.  They are young people with 15% deposit and were looking for a mortgage online.  They have one now and are proceeding with the purchase.  However, they need their £1000 back to pay the solicior's fees and disbursements, etc.

haras_n0sirrah

unfortunately if no one advised them then I am not sure much can be done. HSBC charge non refundable booking fees. As others have said we always advise these fees to be added to the loan and then paid off once the mortgage has started if desired. Unfortunately one of the pitfalls of diy'ing and getting it wrong.

dunstonh

dunstonh - why do you say its a non-refundable fee? 

When a fee is non-refundable, they state that.     HSBC is one of the lenders known to have non-refundable booking fees on some of their mortgages.   

The only two ways to get a non-refundable fee back is either if the bank failed to mention it was non-refundable or the goodwill of the bank.

Thrugelmir

PaulCarpenter said:

I am trying to warn other vulnerable people not to fall for same trick.  

Not a trick. Less haste more speed as the old saying goes. Seems they opted for the non advisory route online.