Help!! think i ve been ripped off by broker.

Bunty1992

Hi, new to site folks,only wish i had found earlier. great info from all involved. hope i on correct thread,will keep to the basics for time being. Contacted broker for remortgage + mortgage to purchase 2cd house(210k). Broker took £500 up front 2 months before deal actually concluded. Took him Three and a half months to actually get a mortgage and re-mortgage and that was only after I myself pestered the soul case out of the lenders and ran about collecting information they needed. I sent Broker a cheque, post dated, basically to get him off my back because he said he couldn't move forward without some up front money. He CHANGED the date on the cheque so he could cash 2 weeks early and presented it to the bank!!!!! Final outcome was that although mortgage and re-mortgage went thru, the mortgage was actually £8000 short of what I'd been told I was to get, the reason for this being the lenders found more credit cards on my record than I have listed - I had listed all my credit cards, but the Broker changed the form before submitting to lender!!!!! The shortfall caused the deal not to conclude on time, I was told by the Broker to set up a "Deed of Variance" (ask the sellers to drop their price to cover the broker fees!!! I was also told to ask a friend if I could borrow the money) The broker could have released his fees from the solicitor but point blank refused even although the deal might not have happened This all happened before the deal was concluded, he was making sure he was having his money. In all he wants £9000 (plus his up front £500 plus what he gets from the lenders) in fees for arranging a mortgage and a re-mortgage. I phoned the MCCB who told me to call FSA as they only had a day until they took over. spoke to fsa and was told he could charge what he likes as long as its in writing. the broker did put his fees in writing for agreed amount borrowed (4% reduced to 3%) but what was agreed was £8000 more than what was delivered. deal only concluded due to sellers agreeing to wait until later date for £1000 owed in penalties. have send letter of complaint to broker. is there any other course of action available to me?

MarkyMarkD

Why the heck did you agree to pay 4% in the first place?

And I'm almost definitely sure that it's illegal for any broker to make you pay an up-front charge - they are only allowed to charge if they actually get you a loan.

Bunty1992

Hi, MarkymarkD thanks for replying.
Broker told us that was the normal charge, when we first started this we hadn't a clue what to expect, we'd only dealt with banks before but this broker said he could get us a mortgage and re-mortgage given our circumstances and the high amount of money involved.
We did question the 4% and he reduced it to 3% which was bad enough but he didn't get us all we needed to conclude the deal and we had to use our savings to make up the shortfall. He's had £3300 plus £500 from us he now wants another £5640 - can he insist on this given that he didn't get us the mortgage and re-mortgage we needed and we had to fork out the shortfall to conclude the deal and we have still to pay the sellers their costs - he still wants the 3%.
We plan to contact the FSA today to ask if there is anything we can do, because we had to pay the £8000 shortfall we have nothing lft to pay him with - he's sent letters wanting us to enter into a bond but our solicitor has rejected that but it hasn't stopped him pestering us over the phone all day every day. We need some advice and help, if us taking action against this broker stops some other niave person being ripped off the way we have been then it will have been worth the hassle but we don't know how to go about it - any advice????

P.S. Really getting into this site now won't be ripped off again for sure (hopefully!!) ???

dunstonh

Any changing of the contracts by the broker is fraud.   However, you should absolutely make sure they were changed before saying things like that as it may have been an omission.

Do you know if he changed the date on the cheque or did he just present it early and the bank pay it?

The fees you paid are massive and way above what you would expect to pay.  However, as you agreed to them, that part is your fault.

An IFA can charge and collect fees up front for a service so I cannot see any reason why a mortgage broker cant.  However, mortgage rules are still different in a number of areas to IFAs, even where there is overlap, and one of the mortgage brokers can confirm that.

payless

Under old rules brokers could charge both upfront and completion fees.

Upfront fees had to be refunded ( less max £5) if deal not concluded.

Understand now that in some cases that £5 rule does not apply

FSA do state that fees can not be excessive!
mentions things like " general level of marketplace)

£500 + 3% seems to be a silly amount , I have seen big brokers charge 1%, and some Right to Buy brokers charge more, but as many brokers don't charge at all it does seem naive that you agred 3%.

I suppose you completed knowing you were short does not get you out of the agreement, but whether it would stick under the "excessive " issue.

That said are we getting a full story here

Why diid you use that broker

You mention items like changing the form before submitting...

Is he now FSA regulated!

Bunty1992

Thanks for your reply DD.
Definately changed date on post dated cheque, bank confirmed date to me.

Bunty1992

Hi Payless, thanks for your reply.

We previously used this brokera few years ago for a buy to let mortgage and had no problems, he has a contact in Scotland who we have used before, that siad, we were both busy working silly hours and didn't take the time to go thru things in depth and didn't know we were being robbed - expensive lesson now learned -
We have in the past had credit problems which were business related, these are thankfully now behind us, but given the past record, we thought no-one would touch us and this broker said he could guarantee us getting the mortgage and re-mortgage - to be honest, it was easier rather than go thru the selection process - our fault there.

But - do you know if there is ANYTHING at all we can do to save us paying him anymore???? Do lenders know these type of brokers exist??? Can the lenders do anything?????

Thanks again - I know I sound a complete idiot, believe me, right now I feel it, but surely there must be something we can still do - hope you can help.

Thanks

dougk_2

If the date has been changed on the cheque then are the bank liable for accepting it?

I would contact a solictor and get legal advice.

Other option is to find some big ugly mates to sort him out ...... :P
(only joking!)

dunstonh

You could threaten to report him for fraud and see if he agrees to waive the fee?

Robert_Sterling_3

He could get brokers a bad name.

Bunty1992

hi payless. as said before both of us work long hours,6 days per week and didnt take the time to check out other options availlable to us. we have known this contact in scotland for a number of years now(very plausable he is), but on hindsight alarm bells should have rung with the amount of times he seems to start dealing with new brokers, with no mention of how previous ended. he has dealt with this current one now for at least 4 years that i know about(they must be doing ok with suckers like us). it was to convenient to give him the deal knowing he would bring it to conclution. better the devil u know as the saying goes. have sent a letter of complaint to both of them asking for the 3% to be justified against others in their marketplace. ps if u think we were niave on this deal i looked back to the last one they put together on 18.8.03 and is as follows. payment of transcription fees £50.00, broker fees £500.00 up front + 5% of monies borrowed, lending principals fee £395.00 + solicitors fee. this was on a mortgage of £38000.00. interest rate 2.75% over libor, charging rate 7.4%. thanks to all who replied to 1st post.