Mortgage Broker made a mistake - what are my rights?

DettaWalker

In October last year, I worked with a large mortgage broker to lock in a 5 year fix for my remortgage this year in April when my existing deal comes to an end as I worried about interest rates rising. I’ve successfully applied to the mortgage and “secured” my deal pending a valuation of my house at 0.99% for 5 years. I’ve asked the broker to confirm that this offer would be valid for my required timeframe which they did in writing. The broker now informed me (January 7th) that my deal is expiring on the 28th of February which won’t be in time for my mortgage to come to an end and I would have to pay early repayment charges if I wanted to meet this timeline.  They said on the phone that the mistake is on their side as they made a mistake with the deal duration (it was indeed only valid for 4 months, not 6). 

I’ve asked them to escalate this to the bank in question and see if they can get the offer extended (they can’t) or for the bank to waive the early repayment charge as my existing mortgage is with them and my new mortgage would also be. They have declined to do this as well.

The broker now informs me that my only option is to look for a new deal with another bank at 1.27% interest which would be about £4,140 more expensive over 5 years. With rising inflation, utility bills and stagnant wages, I struggle to accept this, especially since I was assured my deal would be valid for 6 months in time for my remortgage. Seeing how I have this assurance in writing, there must be some form of liability on the broker's end?
I'm also on hold with Santander  on the complaints line, but I have little hope.

Any advice is appreciated!

K_S

@DettaWalker Is this a remortgage (where you change to a new lender) or a Santander product-transfer/product-switch/rate-switch which involves no credit-check, no income verification, no physical valuation, etc.? 

If it's a product-transfer, I'm just a bit confused as to how the broker even managed to process the PT earlier than 4 months before the end of the fix. I haven't done a Santander PT recently for a client, but off of the top of my head, the system shouldn't allow it or only allow it after confirming that an ERC would be payable and generating an illustration showing that.

In any case, if the broker isn't taking the issue seriously, I would say perhaps put in a formal complaint to the firm using the process described on their website. There might be more relevant info in the background, but based on the limited info in your post, they seemed to have messed up.

DettaWalker

K_S said:

@DettaWalker Is this a remortgage (where you change to a new lender) or a Santander product-transfer/product-switch/rate-switch which involves no credit-check, no income verification, no physical valuation, etc.? 

If it's a product-transfer, I'm just a bit confused as to how the broker even managed to process the PT earlier than 4 months before the end of the fix. I haven't done a Santander PT recently for a client, but off of the top of my head, the system shouldn't allow it or only allow it after confirming that an ERC would be payable and generating an illustration showing that.

In any case, if the broker isn't taking the issue seriously, I would say perhaps put in a formal complaint to the firm using the process described on their website. There might be more relevant info in the background, but based on the limited info in your post, they seemed to have messed up.

So my existing mortgage is with Santander. I phoned up a broker in October to remortgage my house as my fixed rate comes to an end in April. I wanted to get my application in before the BOE hiked interest rates to secure a deal with an older rate.When they checked the market, they advised me Santander would be the best deal (this was pure chance that it happened to be them). 
So even though my existing mortgage is already with Santander, for this application I had to do the full paperwork - payslips, income verification etc. But I do have to say that my new mortgage is for a higher amount than it was originally (I'm building an extension which is now nearly complete) and i had borrowed additional money in the interim also from Santander.

to simplify it:
Original Mortgage: £x, expires in April (3 year deal ends) - Santander
Additional borrowing (applied in September, approved in October (and funds released) for an additional £y, variable rate) - also Santander

late October: contacted broker to apply for a remortgage to complete in April 2022 when my deal of the original mortgage ends for the amount of £X+£Y. This is where the 6 months is relevant. Broker selected the best deal for me that met all my criteria (and confirmed this in writing) that the offer (once the application has been submitted) would be valid for 6 months (long enough to carry me through to the old mortgage expiring).

I even pointed out to him that I find it odd, that Santander would allow a 6 month offer expiration date, when direct it is only 4 months and he confirmed in writing again that the offer wouldn't expire until 6 months. So I submitted all documents and got updated on progress, Santander's solicitor got involved (Enact) and the valuation was triggered. So it has entered the systems. it is only now, 2 months later, that the broker phoned me up to say teh deal would expire on 28th February.

Does that make more sense?

K_S

@DettaWalker Thanks for the timeline. Maybe I'm missing something obvious but I just can't figure out how they've done a proper 'remortgage' application with Santander given that you're already with them.

Perhaps what has happened is they wrongly put in a 'remortgage' app, then Santander cancelled it (or changed it to a PT offer) after their systems finally figured out that you were already with them and that triggered the call from your broker. 

Perhaps @ACG or @Deleted_User can figure out what they seemed to have done here.

ACG

I submitted my first ever case to Santander this morning so I am probably the worst person to ask on the santander front. 

However, if I were the broker on this case and this had happened. 
I would go back to my research and I would find the cheapest lender who offers a 6 month offer period where you fit criteria/affordability and work out the difference in cost between that and what you can get now. if it were say £65 a month cheaper, I would offer you either £65 a month for the next 5 years (which would be £3,900) or something like £2,800 as a lump sum. 

Ultimately the broker has dropped the ball. They have to put you in the position you would have been had the mistake not happened. 

In this case, you were not eligible for the product with Santander. So that can be disregarded, so it is a case of finding what the recommendation would have been had they got it right. 

Also there might be an error on Santanders side for allowing the PT to be submitted but I am just going off what K_S is saying for that. So you may be able to get some sort of goodwill gesture but dont quote me on that. 

[Deleted User]

A few observations
1. Santander does not allow brokers to do additional borrowing on existing mortgages.
2. PT system would have been locked until 4 months prior to expiry.

I use Santander a lot. I like them, they have good systems that wouldn't make a mistake like this. 

If broker has documented a remortgage from santander to santander with capital raising then they have dropped the ball in an extreme way.
Being cynical, if they work for a large corporate brokerage then they may have tried to just do whatever was needed to get your mortgage on their figures to keep management happy.  Seen it before a thousand times when i worked in that environment. 
I personally dont buy it being a mistake as the existing customer qnd remo systems are completely different access points on the portal.  

Do not complain to Santander. They have no liability to you as the broker provided the advice.  Register a formal complaint and ask for what ACG said. The best 5yr fix and it to match the total you would have paid on the best 5 year you would have qualified for last year.

If you want to stick with Santander then you will have to speak to them directly as they dont allow brokers to do additional borrowing.   Get confirmation from brokers complaints department that they will still cover the difference.

If i had made this mistake i would fully expect to be paying thousands in compensation so dont give up

Edit:  ask for a copy of your application to the lender.  That wil clearly show if they've tried to do it as a remortgage and will form part of your evidence when you ask for compensation 

getmore4less

As you are on the PT window check yourself what rates Santander will give you.
(They hide rates for PT so you need to check)

Also do some research on the rates of the main lenders around the time you got the "offer"
quite a  few lenders keep their historic rates available on-line.

eg. Nationwide remortgage rate 60% LTV 999 fees   

Went from 0.99% to 1.24% on the 20th Oct.
Timing might be quite important

Also you can't just use the difference in payment to work out any potential loss 

eg if your  £4140 is £69pm over 60m that puts your mortgage into the £530-£550k range
for a few terms  0.99% against  1.27%

20 £549k £2520
25 £540k £2030
30 £530k £1700

The 20y option with more accurate numbers  and the £69pm difference paying the higher amount then what's left after 5y

amount	rate	payment	owing
£548,500.00	0.990%	£2,589.14	£417,131.91
£548,500.00	1.270%	£2,589.14	£424,140.42

 That £4140 turns into ~£7k
There will be fee differences to factor as well

DettaWalker

K_S said:

@DettaWalker Thanks for the timeline. Maybe I'm missing something obvious but I just can't figure out how they've done a proper 'remortgage' application with Santander given that you're already with them.

Perhaps what has happened is they wrongly put in a 'remortgage' app, then Santander cancelled it (or changed it to a PT offer) after their systems finally figured out that you were already with them and that triggered the call from your broker. 

Perhaps @ACG or @Deleted_User can figure out what they seemed to have done here.

I am starting to think along your lines to be honest. My broker is super keen I do not proceed with an early completion. I was on the phone with Santander and they told me I am eligible for a new product without an EPC now, but despite pointing this out a number of times to the broker, he keeps on telling me they can't extend the offer - which makes me think it is not there anymore.

DettaWalker

ACG said:

I submitted my first ever case to Santander this morning so I am probably the worst person to ask on the santander front. 

However, if I were the broker on this case and this had happened. 
I would go back to my research and I would find the cheapest lender who offers a 6 month offer period where you fit criteria/affordability and work out the difference in cost between that and what you can get now. if it were say £65 a month cheaper, I would offer you either £65 a month for the next 5 years (which would be £3,900) or something like £2,800 as a lump sum. 

Ultimately the broker has dropped the ball. They have to put you in the position you would have been had the mistake not happened. 

In this case, you were not eligible for the product with Santander. So that can be disregarded, so it is a case of finding what the recommendation would have been had they got it right. 

Also there might be an error on Santanders side for allowing the PT to be submitted but I am just going off what K_S is saying for that. So you may be able to get some sort of goodwill gesture but dont quote me on that. 

that's what I am trying.. although L&C are doing their absolute best to deflect and just get me to apply for something new. I've sent a note to their complaints department now and also contacted the times money Question of Money column

DettaWalker

Deleted_User said:

A few observations
1. Santander does not allow brokers to do additional borrowing on existing mortgages.
2. PT system would have been locked until 4 months prior to expiry.

I use Santander a lot. I like them, they have good systems that wouldn't make a mistake like this. 

If broker has documented a remortgage from santander to santander with capital raising then they have dropped the ball in an extreme way.
Being cynical, if they work for a large corporate brokerage then they may have tried to just do whatever was needed to get your mortgage on their figures to keep management happy.  Seen it before a thousand times when i worked in that environment. 
I personally dont buy it being a mistake as the existing customer qnd remo systems are completely different access points on the portal.  

Do not complain to Santander. They have no liability to you as the broker provided the advice.  Register a formal complaint and ask for what ACG said. The best 5yr fix and it to match the total you would have paid on the best 5 year you would have qualified for last year.

If you want to stick with Santander then you will have to speak to them directly as they dont allow brokers to do additional borrowing.   Get confirmation from brokers complaints department that they will still cover the difference.

If i had made this mistake i would fully expect to be paying thousands in compensation so dont give up

Edit:  ask for a copy of your application to the lender.  That wil clearly show if they've tried to do it as a remortgage and will form part of your evidence when you ask for compensation 

That is a fantastic piece of advice - getting a copy of my application. They have to give it to me right?
My worry is that if I go ahead with a different lender / product, then I will lose my right to compensation - so I am holding on at the minute.. but should I?

ACG

You can proceed. 
You have a sort of obligation to help limit your costs. So sitting on SVR for 6 months whilst you argue it out is not really limiting your costs. 

Choosing a product that is as competitive as possible is. If anything that actually helps things as you can then also draw a line as to the difference between what was available and what you went with. It then just becomes a case of working out how much worse off you are and then agreeing an amount. 

They may not want to pay you £7k, why would they. But if that is what you are entitled to, then they pretty much have to, especially if you put a calculation together for them to explain how you got there (assuming the calculation is correct of course).