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Mortgage Brokers Fees

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Can anyone help me?


I have used a mortgage intermediary and was advised that he would charge me a fee of 0.75% of the loan amount as his fee. I agreed to this as it appeared I was getting a very good rate with lots of benefits.


However, at the point of him advising his fee, he advised that this figure was so high as I was not taking out any insurance or endowments with him and that he would not be earning any money elsewhere. I received the mortgae offer and note theat the lender is forwarding a a commission of £910 to him. That would be in addition to my 0.75% commission!.


I have also discovered that he has not disclosed this figure to the lender and it appears he is in breach of the FSA guidelines. When I questioned him about the commission he became very agrressive and claimed that he did advise me. My notes tell me to the contrary.


He has threatenend to cancel my mortgage offer with the lender. About a week ago my answerphone broke down and was receording all in coming calls. One of the calls was his and he recorded demanding me to pay his fee in cash.


I'm just not comfortable with the way he is working. Any advice.


Can he cancel my mortgage offer? Desperately need some advice.




the fenz

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If its not on your offer, IDD or KFI you are not liable for it.

As soon as you started talking mortgages you should have given an IDD. This shows the type of broker you are using eg. does he give advice or information only? Also outlined is the fee structure used by the brokerage, whether they charge fees and if so how much and if they recieve any fee from the lender.


The broker fee and lenders commission to the broker are also shown on the KFI which you should have been given before any application was made to show you all the details of the deal you were taking.


These are compulsory documents.

You could contact the lender on the number given on the offer letter and talk to them. No reason why you should have to change your mortgage at this stage and the broker will only get paid what is shown on the offer.


If the commission is paid via a third party ? You could speak to them.


Phone the FSA


Any body connected with this broker will be very concerned at his actions.

Leaving you a message to pay in cash is disgraceful.


Let us know what you decide to do.

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  • 2 weeks later...

The broker wrote me another letter threatening me with Court Action. He cancelled my mortgage and then said that I try and draw down the mortgage directly, he will sue me for his commission.


I wrote back a stern letter today advising that his actions were illegal and that I had been in contact with the FSA who had explained the correct procedure to me. That put the wind up as his partner called me within 2 hours apologising and now saying that I can forget the fees, he will refund any monies I have paid and that he will sort things out for me. He couldn't have been sweeter. Pity he did not see fit to inetrvene earlier!


However, he asked that we try and resolve matters without the FSA or any other intervention. Let's see what he comes up with now.


The attitude earlier was let's sc**w this guy - now it appears I have him by the short and curlies.

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What???? This is disgraceful.


I feel slightly sorry for the partners situation as he may be genuinely trying to help but chances are hes just fending off an FSA investigation.

Your mortgage was cancelled.

I hope it wasnt for a purchase or a re mortgage that you needed in a hurry.


You have done nothing wrong and can be sued for nothing.

Please report this guy to the FSA - its this sort of behaviour that gets brokers a bad name and by the sounds of it its normal practise for this guy.

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