Mortgage broker £1800

Lihar40

Hi I am hoping to hear from anyone who has had similar experiences or has knowledge in this area. I've tried to do as much research as I can and maybe I will need to get a solicitor involved or maybe it's a simple case closed. My sister is looking to move from a shared ownership to a "normal" mortgage. Quite often her affordability has been an issue and its not been possible, her credit is good. She doesn't know how mortgages typically work and basically I just found out she signed a terms of Business and paid £1800 to a guy who said he could get her a mortgage In principle. Which he did. The fee was apparently due to his amazing contacts. After finding out I asked her several questions as was concerned that he was being overly friendly, complimenting her on her voice and just I don't know. Something felt off. I've never paid that much to a broker.

She was very confused about many aspects so I got on a call with both of them and asked 10 direct questions. She'd at this stage only had a Mip and he told her to go and find another property before selling hers. I felt that was the wrong way around as how could she know what money she had to play with but he couldn't see that. He didnt like my qs and got very short and went down the route of asking which company I worked for and dismissing it as a feeble attempt to insult me (failed). This is after he tried saying I also had a lovely voice and I left silence in the air. Ultimately I don't trust him. I don't think he's done anything illegal or dodgy, he's just spotted her naivety. He has refused to put anything in writing by only returning her emails with calls. She wanted things in writing to understand them but he will only speak on the phone. Promising to slash this charge or do that.  But never confirms in writing. He was pushing my sister to talk about life insurance and she tried to say no but he was being persistent which is why she asked me for help. So anyway she asked to cancel and get a refund as all he has so far done is get a mip and I know she can get a free mip elsewhere. He's declined saying that his company is exempt from a refund due to the services of his company and that the only thing would have been on the Terms of Business but that in there it says no refund is possible. And then carried on talking with a "tough luck but we will find you a property" type of language as if she's stuck with him. I thought the fee was very steep and he said when challenged it's because he can also help negotiate buying a house?! And that he has 30 years of experience. Is it true a few can buy the better mortgage and rate??
So is he exempt..? She's not covered at all under any rights to cancel, because it's a financial service? She cancelled on the 7th day after signing. I just wondered if the contract could be challenged or if it states no refund, that's that.? He seems pretty confident that she can't cancel or get her money back. 

ACG

The problem is that he charged his fee to obtain a Mortgage in Principle - he got the mortgage in principle. He has kept to his side of the contract. 

From a morality perspective, I am not siding with the broker. My view is that you go to a broker for a mortgage, not an MIP and so ultimately the fee should be charged when you get your mortgage. But some brokers take the view that if they are doing work, they wanting paying for it (understandably). 

The broker has a regulatory responsibility to try and work with customers and any additional requirements they may have. If your sister needs information in written format in order to digest it, I do not think that is an unreasonable request. If your sister needed the information in a different language and your broker was not able to speak that language then I think it is unreasonable (those are just my opinions). 

If your sister is unhappy, she can complain to the brokers firm - presumably there is a section in the terms of business which explains what to do if unhappy (there should be). The broker then has to investigate and decide whether they accept the complaint or reject it. If they reject it your sister can then go to the ombudsman - all of this process could take a few months though. 

You or your sister not being happy with the fee is not really a valid complaint though. The time to disagree with the fee was prior to getting what was agreed and/or signing the contract. 

dunstonh

The terms of business should state the refund terms, if any.  Normally, the fee would have a refundable element (not necessarily 100%)  if it is before a certain stage and become non-refundable if it goes beyond that stage.

The requirement is to specify the refund terms and when they apply.      If would be expected to state it is non-refundable beyond a certain point.   Some brokers will say its non-refundable from mortgage application.  Some will say from the research and recommendation (as technically, the broker is responsible for the recommendation and the person could take that advice and go direct leaving the broker earning nothing)

The FCA does not define what the point should be or what the terms are but they should be clear (and under the consumer duty that starts next month, justifiable - unfortunately, pre-consumer duty rules would apply here).

£1800 is a staggering large fee unless the commission is being rebated or it's a difficult case - e.g. sub prime.    However, it happens.  I am an investments adviser and our fee is capped at £3,000 but others have no cap and recently on a £500,000 new client, another firm quoted that person £25,000 compared to our £3,000.     The regulator currently has no problem with that sort of difference.      Damned expensive is allowed, even if it's hard to morally justify.

ElwoodBlues

If he never puts anything in writing, how did he tell her the t&c?