Wrong Financial advice Can i Claim?? - Countrywide

[hands2bfree]

i have found myself in the following situation:

 

 

• A clear description of your complaint
  

It was recommended by the estate agents at Bairstow Eves to seek advice from FA on how much we could afford to borrow when looking for a house.

We made an appointment with her and we went through the finances to establish the costs and what we could afford (That was in May, I think)

We went through our out goings; which included the loan for £15000 @ £230/ month.

At no time did FA question about this loan and or what was the security being used for this, we presumed as she was the financial expert she would have advised on the consequences of this and how it would affect our calculation for the new mortgage. As a Financial Advisor we trusted her to give us correct advice.

(The loan was secured against our property as a second charge.)

On FA advice we were told that we could obtain a mortgage by the following sums:

£110000 – price of sold house

£80000 – outstanding mortgage

£30000 – left over

So...

£5000 – fees

Leaving £25000 as a 15% deposit

This meant we could look at houses priced at an approx of about £166000.

We found a house priced at £162500 and had the offer accepted.

The chain was complete and the process of exchange started. (Mid June)

 

It wasn’t till our Solicitor informed us, that the loan we had was secured on the property. (Mid August)

The mortgage that FA was arranging FA was with NatWest and they have a LTV policy of 95%.

The loan company, which we had the £15,000 with, have a LTV policy of 90%. It was then that we were then informed that unless we could pay up £10000 we would not be able to proceed with the move.

We had no spare money as the advice that FA had given included that we to use some of our equity for the fees, now we are out by £15000!

Please bear in mind that at this time the rest of the chain was ready to exchange!

SO it was some two months later were finding out this information. I would stress that if we had been given the correct advice we would have looked for a house that we could have afforded within our budget.

Now we were put in a position where we would have to pull out of the sale, we had paid HIPS, some solicitor’s fees, and taken credit hits leading up to this move.

We were looking at losing several thousands of pounds, not only that but the time we have lost too, and in this housing market time is money lost on the house value.

Also consider the other members in the chain who would be at a financial loss.

 

I know moving house is a stressful time, so it doesn’t need unnecessary aggravation that comes from bad and unprofessional advice from the financial advisors to add to the situation, they should help not hinder the process.

 

My wife and I have had to take time off work because of the stress that this has caused. The unnecessary pressure as a result has cost us. I personally have broken out in Psoriasis over this.

 

On the 22nd of September I had to contact FA about pulling out due to the afore mentioned situation.

When I notified the Agent about my position and that I would have to pull out of the sale he came back to me to advise that the seller of new house was willing to drop the house price by £10000.

 

Here again with advice from FA, it seemed that we could now proceed, I should have learnt from my first mistake!

It wasn’t till several phone calls later with her that although the property value had dropped.

The LTV % was still a criteria.

£152000 new house price

£130000 new mortgage

£30000 left over from sale of house

So...

£22000 deposit

£8000 left to pay the part of the loan, which would decrease the LTV to 90%.

 

Another example of incorrect advice and direction

 

Now this left me with the problem I have now. I have no money for fees!

So I could pull out and still have to pay fees or I could continue and gain the house I want, and have waited for and still pay fees.

Granted Bairstow Eves is a fee, of no sell no pay.

But I still have solicitor fees and the fees I have already paid to consider.

 

I also asked if the mortgage could be amended to include the fees, but FA was unwilling to go with this and said to do that would mean a new application. Whereas lowering the mortgage was just a straight forward amendment. I thought an amendment was just an amendment??

I have to wonder whether FA was unwilling to produce another amendment because she had made a few mistakes already. At this stage we did know that the FA’s Regional manager was aware of the situation.

 

So we have decided to proceed.

 

I have requested the estate agents, through Lxxxx, to reduce their fee or fore-go it, due to the mis-conduct in the advice that has been provided but this has been ignored. I was somewhat annoyed and dismayed at the ‘cavalier’ attitude when the as the estate agent put it “all is fair in love and war”?!?!

 

Can you imagine how that made my wife and I feel?! Not only stressed due to your employees bad advice but now we have the lack of professional courtesy to help a customer out in this situation which by all accounts I feel we have been forced into by your selves.

 

I know Countrywide can’t legally advise beyond 90% LTV and I appreciate that, but if that was the case that FA couldn’t advise then why did she not suggest going for a lower mortgage. I have to ask whether your company was just desperate for a sale or whether it was just someone who was not qualified to give us the advice we needed.

 

But extremely costly mistake, that has cost me £8000 loan and £5000 fees!!

Plus the extreme emotional stress and illness!

 

• Details of what you would like to be put right
  

After you have read my details I would like you to consider what you would do to put right the situation?

I believe a compensation to cover the fees incurred of £5000.

And a monetary value to cover the stress incurred and days off ill at work.

 

Also maybe some training for FA, so that this mistake is not repeated and no further emotional or monetary harm is done to anymore of your customers?

 

I am not one who normally complains. I usually try to see things from other people’s perspective. But we are talking a lot of money here. Not only mine, but other people, which was put at risk.

Now I’m paying for that mistake.

 

My solicitor suggested I complain to you, that the Mortgage advisor was at fault.

The rest of the solicitors in the housing chain have pointed to FA as the hold up in this procedure.

NatWest mortgages suggested I complain to you, that the Mortgage advisor was at fault.

My father Managing Director of a large Residential Developer, who deals with the selling and buying of homes, even suggested going to the FSA and filing for misconduct with the Ombudsman. Do I need to do this?

Even the Estate agents at Bairstow Eves said that this would not have happened if FA had done her job properly.

 

The bottom line is:

Why should I be paying for your financial advisor’s mistake?

 

Regards

 

 

 

any thoughts would be good

[buzby]

Just an observation. The figures provided by an IFA invariably have caveats for these calculations - for example, unless she was specifically advising on a particulat mortgage product OR took the 95% figure as 'typical', the fact the eventual mortgage company would only go to 90% would not be an issue for her, UNLESS she had recommended this particular company's product explicitly - in which case, she would have erred and been responsible for the misleading information. In the absence of this, it would be jusr 'one of those things'.

[hands2bfree]

thanks buzby, she actually did advise on the mortgage product and specified the needed deposit at the time. she also acted on our behalf of obtaining the mortgage from NatWest.

[buzby]

Excellent - She needs to be brought into the issue to highlight the disparity, as there is a possibility she could assist in providing a resolution with the mortgage company (not always, but certainly worth a try!).

Edited October 27, 2009 by buzby

[hands2bfree]

How would i do this?

 

Just to let you know i did contact Countrywide complaints dept.

Who the FA works through, with the information i provided in my first post and they have asked for authority to look at the NatWest agreement.

 

Again thanks for the reply.

[buzby]

Email or phone her to advise of the issue, as your situation (problem) is directly related to her advice, she may well be in a position to do something behind the scenes to resolve it. If you donlt have her details, contact the agency that introduces you, and take it from there.

[hands2bfree]

When the mortgage was going through and i had done the sums which made me realise i would be in debt from the situation, i had contacted her and asked if she could help.

The only sugegstion she could give at the time, was to ask the estate agents who she share an office with to forego their selling fee. This they were unwilling to do.

As for changing the mortgage or approaching NatWest, again she was unwilling to do so and said that i should be the one contacting NatWest.

[buzby]

I was hoping for more involvement that simple 'fee waiving'. As you found, it was a request that was ignored. In the absence of anything concrete, the next step is to discover what T&Cs applied to your advice, in case she was planning to body-swerve responsibilities that should have been part of her duty of care. If there's nothing untoward, then - if things have taken a turn for the worse, you need to quantify your losses due to the advice given, and present them to her as the cost to you of following her advice, and what her proposals are. The fact she works out of the same office as the Estate Agency may not be a material fact here - should could be siply renting office space.

[hands2bfree]

I was hoping for more involvement from her too... Hmmm, so if i were to write to her and say i think you have put me in debt by £5000? What are you going to do about??? and expect a response back?

 

Im not sure of the terms of conditions? and im not sure what 'duty of care' entails.

I have no real financial knowledge in this area, and what i should do.

[buzby]

IFA's are regulated - and I recall they have to have professional insurance (in case it is found that they gave misleading advice). However it might be easier to take things a step at a time - try to get the issue resolved informaly wherever possible. If this comes to nothing, the FSA may be able to act as mediator, then there's the court for your actual losses, but in this latter case winning is never assured, so it is always best to get some sort of equitibale resolution before taking this step. Good Luck!

[hands2bfree]

Ok. I think I have it right.

1. I tried to talk informally to the mortgage advisor but she 'body swerved' the deal.

2. I approach the company the mortgage advisor works for, and tell them what happened and see what they want to do about it? (This is the stage im at, and they have asked permission to look at the details of the 3rd parties involved) I should give them that authority and let them go ahead and see what reuslts they get?

3. The next step, if i understand correctly what your saying is, if unresolved, I approach the FSA to act as mediator?

Hoping for an 'equitibale resolution'?