Is it normal to be charged by two mortgage brokers in this situation?

Aurora_Ein

Hi everyone,

We recently applied for a mortgage through broker A. After much effort everything else was fine except the valuation, so we were unable to get a mortgage offer due this issue. 

Broker A then found a product through broker B, and to save time, broker A arranged for B to liaise with us directly.

Now that we have successfully secured the mortgage and completed through broker B, our original broker A is requesting payment of their fee. This was a fixed fee we had signed in the ccontract when we first appointed them, and it was based on them securing a mortgage.

While I do appreciate the effort they put in, and the fact that they introduced us to the new broker, I am unsure whether it is reasonable to pay their full fee, especially when we also have to pay the new broker separately. It feels like a bit of a loophole, where brokers could essentially double their fees by referring clients on.

Has anyone had a similar experience, or know whether this is standard practice?

Thanks in advance!

kingstreet

Is it another broker, or is it a packager?

Firms like Brightstar, Crystal, TFC, Complete, Truffle, Fluent etc act as a middleman for the lender accepting applications, checking documents and instructing valuation before passing the fully packaged application to the lender for a decision. Such lenders may not accept business directly from the borrower nor a broker.

Usually, such firms have a fee which is payable by the applicant.

Aurora_Ein

kingstreet said:

Is it another broker, or is it a packager?

Firms like Brightstar, Crystal, TFC, Complete, Truffle, Fluent etc act as a middleman for the lender accepting applications, checking documents and instructing valuation before passing the fully packaged application to the lender for a decision. Such lenders may not accept business directly from the borrower nor a broker.

Usually, such firms have a fee which is payable by the applicant.

Thank you, its another broker B, who found us a product with a different lender. 

kingstreet

I can't say then.

It would depend on the fee agreements you signed.

housebuyer143

What do the T&C's say? If it's payment on mortgage offer and you didn't get an offer then I wouldn't pay him. If it was payment on mortgage application then it is due. 

I would argue that they didn't make it clear the fee would be due for the referral and that they didn't get you the mortgage at all, broker B did. 
If he wants he can take a referral fee up with broker B. Many already have shared fee arrangements for ones they refer to other brokers.

Aurora_Ein

housebuyer143 said:

What do the T&C's say? If it's payment on mortgage offer and you didn't get an offer then I wouldn't pay him. If it was payment on mortgage application then it is due. 

It is payment on mortgage offer, but broker A seems to think we should pay them as they found the product via broker B for us.
But broker B also got us to sign a contract to pay a fee on mortgage offer. So we end up paying two set of fees. 

housebuyer143

Aurora_Ein said:

housebuyer143 said:

What do the T&C's say? If it's payment on mortgage offer and you didn't get an offer then I wouldn't pay him. If it was payment on mortgage application then it is due. 

It is payment on mortgage offer, but broker A seems to think we should pay them as they found the product via broker B for us.
But broker B also got us to sign a contract to pay a fee on mortgage offer. So we end up paying two set of fees. 

No, I think taking it as it sounds he didn't get you an offer, he referred you elsewhere. If he requires payment for that, that is between him and broker B.

Hoenir

Aurora_Ein said:

housebuyer143 said:

What do the T&C's say? If it's payment on mortgage offer and you didn't get an offer then I wouldn't pay him. If it was payment on mortgage application then it is due. 

But broker B also got us to sign a contract to pay a fee on mortgage offer. So we end up paying two set of fees. 

Well yes. Every business has costs to cover. Before undertaking work they want to ensure that they got paid. By signing multiple contracts you've left yourselves potentially exposed to a double charge. 

ACG

As kingstreet says, some brokers use packagers for complex cases. 
A packager is like a middle man between broker and lender. However in those cases, you would still normally deal with the initial broker and the broker would deal with the packager and the packager the lender. We have not used a packager in close to a decade so unless things have changed, that is how it used to work. 

If you had been dealing with Broker B directly, then I think it is hard for broker A to want their fee unless they charge on application rather than offer/completion (in which case, they did apply for the original mortgage). 

Speak to the broker and discuss it with them.