Suspicious mortgage broker

dunedin89

Hi everyone

First post from me.

Tl;Dr: mortgage broker trying to pull the wool over our eyes and potentially pocket two broker fees

Wondering how to go about making a complaint about a mortgage broker and if it's worth while? I'd be looking for a fee refund atleast.

Context

My partner and I engaged a mortgage broker in the sumer to help us with a purchase of £460,000.

As first time buyers we thought that it'd be wise to pay £800 for the services of a mortgage broker. We were offered a mortgage quite quickly valid until November.

Our purchase was set to go through with the funds released from the lender. At the last moment the vendor pulled out on the day we agreed to exchange and the funds were returned. Frustrating but these things happen. The vendor was willing to sell at some date in the future so we decided to let them know we were still interested but probably at a lower price.

We told the mortgage broker about the situation and they said they'd keep the mortgage offer open in the event that the purchase goes ahead in the future.

In August the vendor contacted us asking us if we were still interested and we agreed a price reduction.

Now this is where the complaint originates from because we approached the mortgage broker to change the terms of the mortage offer with the lender. 

Their response was not what we'd expected:

• Needed to submit a new mortgage application because the lender wouldn't accept the reduction in purchase price with an amendment to the offer

• Make a new payment of £1,200 which is significantly higher than the original fee

• Wait a few weeks before they could start an application because of their workload

They did say however that they'd contact the lender to see if they'd make an exception and allow us to make the amendment. 

The following day I went back to the mortgage broker for an update and it was a no from the lender's business development manager. I then called them again and wanted to find out exactly what was preventing them from changing the purchase price with the lender. 

After several attempts asking the same question they finally said that it was due to an internal system change by their firm and not the lender. I then asked them if the original mortgage offer was still there and they said "no because of the internal system change."

I worked out that the application had either been withdrawn by the mortgage broker or the lender and the mortgage broker didn't want to let on. 

So I contacted the lenders intermediary team directly afterwards who confirmed the mortgage offer was still active and could be changed on their application portal. They weren't sure what was going because the mortgage broker hadn't spoken to them about our situation but noted that any amendments to the offer would take 3 working days to process from the point our mortgage broker notified them.

I then called the mortgage broker and told them what the lender had said. They became a bit jittery and said that they'd look into it and call me back. 

Five minutes later the £1,200 fee had disappeared and all of a sudden it was all hands on deck. The mortgage broker advised us to make a new application rather than amend our existing application because it would be quicker this way. With time not on our side we opted for this option and we were keen to get things moving.

{this was a bad decision on my part}

This time round everything seemed a bit odd compared to the original application. It felt as if we were going through the back door - the name of the firm on the mortgage illustration changed and everything was done very hush hush. 

The problem

Our vendor is only agreeing to a price reduction if the purchase completes before the stamp duty rules go back to normal rates at the end of September. 

We're still waiting for an outcome for our new application which was submitted 3 weeks ago. With only 1 week to exchange and complete I think it's unlikely it'll go ahead on that timeline. 

Summary

• The lender confirmed that the existing offer could be amended by the mortgage broker to reflect the price reduction

• Mortgage broker has appeared to have lied to us about initially contacting the lender

• Mortgage broker confirmed an internal system change prevented them changing the offer 

• Mortgage broker would only cooperate if we put in a new mortgage application initially with a fee of £1,200 then reduced to £0. 

• Mortgage broker wouldn't expand on the internal system change within their firm

If completion doesn't happen before the end of September 21 my complaint would be to focus on clarifying;

• why the internal system change prevented the mortgage broker changing the purchase price.
• why submitting a new application would be quicker (when we're still waiting).

I also wonder if the mortgage broker has claimed their broker fee when the funds were released from the lender and is now realising they've made a mistake knowing the funds were returned and is trying to cover their tracks using a new firm as seen on the illustration.

With regards to a renegotiated purchase price if the completion doesn't happen would it be a long shot to claim this as well?

I appreciate that this is a lot to take on. My partner and I have budgeted for years to save enough for a deposit and we feel we're being taking advantage of by our inexperience. 

Any advice would be greatly appreciated especially if this is standard practice and we just don't know.

Robbo66

So you spoke to the lender direct who told you it would take 3 days, the mortgage broker tried to double dip you and yet you still went back. Just ring up the original lender and ask for the amendments to be made

dunedin89

I should've mentioned that the lender could only change the offer on the instruction of the mortgage broker. I did try on several occasions.

To 'save time' we applied to the same lender because we'd been accepted previously and wouldn't need to carry out a valuation compared to say if we'd went with a new broker/lender.

Yes, in hindsight, a terrible decision. I recognise that. I'm not here to be reminded of that. 

I'm here to establish whether or not making a complaint to the mortgage brokers firm and FCA would be worthwhile in obtaining a refund for the initial fee and claim potentially the increase in purchase price at an absolute push. 

Robbo66

I would complain but only after purchase is secured, I would be surprised if you got the fee back as they have done what you paid them to do and thats get you a mortgage. raise the complaint with the company they may offer some form of keep quiet money but again may not be the whole fee

TripleH

Have you paid the first fee and have you been refunded for it?

Have you raised your query with the broker (apologies. If you said but there was a lot of text).

Before getting upset, it is worth checking you have all your facts in place in case you did miss something.

We have had to pay 4 fees to our broker for our attempts to buy, the failed ones were refunded.

dunedin89

We paid the first fee for the mortgage offered to us by the lender. This was the mortgage that we'd wanted to amend but we're told that an internal system change on the mortgage brokers side meant that we'd have to start a new application. 

We haven't raised the query yet. If we do complete before next weeks deadline we'll leave it and move on. However if it doesn't we'll wait until we have a mortgage offer and then broach the subject with the mortgage broker. 

I checked every piece of admin associated with the mortgage broker and there's no mention of an additional fee. I find it odd that they dropped the fee as soon as I mentioned to them I'd spoken to the lender directly. This is also when their attitude changed from 'sorry not my problem until you pay me' to 'ok let's do this.' 

Yes you're right. I think it's important to establish facts and in part that's what I'd hope the complaint would help achieve. 

I'd understand paying a new fee if the mortgage offer expired or we'd made an offer on a different property - but neither of those situations are true. 

nimbo

So have all your searches etc been done?  

All enquiries come back etc? 

How close were you to the finish line before the sellers changed their minds? 

Will you really all be able to arrange moving in a week????? 

dunedin89

Yes, all returns valid and completed since June 21. We live in rented accommodation and are flexible. Vendor informed us on the morning of exchange.

The issue isn't a move in date for us it's the vendor only accepting our reduced offer on the condition we complete by next Thursday. 

If the mortgage broker had amended the existing mortgage offer when we informed them about the situation 3 weeks ago we wouldn't be in this position. By their own admission, an internal system change at their firm has prevented them from amending the existing mortgage offer. 

As I've said previously, this won't be an issue if we complete by next Thursday and it also won't be an issue if the vendor doesn't increase the purchase price.