Mortgage Broker chased commission - did not give me independent advice!

B

bb1000

Guest
I recently approached my local mortgage broker to get advice in relation to purchasing a property at a discounted price from a family member. I was not sure if banks were willing to finance such a mortgage & had been advised that a broker would be the best option. Another family member recommended this broker as they had used them in the past.
I was advised by the Broker that this was possible and he would proceed to forward my application to a number of lenders. The broker got back 2 days later with approval from Haven (seemingly the broker brand of EBS) & also advised they had the most competitive rates.. Delighted with the approval, Mr. Broker advised the property valuation had been instructed. Great... While waiting for my loan offer to arrive I checked the rate quoted on the property supplement & found my rate was not the most competitive. I contacted the broker the next day & was informed that Haven were first to approve & the other banks required further information. I then walked straight into my nearest first active branch (as i was looking for the best 5 year fixed rate) with exactly the same information & received approval two days.
I went back to the Broker & he was furious.. He again advised the loan offer was on the way & did not advise I change. The difference means 1000 euro over the year on my mortgage & I informed the broker i was not proceeding with Haven & didn't feel i got independent advice.

Seemingly Haven are one of the few lenders who are still paying 1% commission to brokers. Clearly he was chasing commission. I don't want to report him to ifsra because it is a small office in a country town & i will see him every week, but i wont be referring business to him!

From what I could find online, a number of banks have changed their commission structure to brokers:

BOI .5%
ICS .65%
First Active .5%
Bank Of Sotland .8%
AIB .5%
PTSB .5%

Lenders still paying full commission to Brokers:
IIB 1%
Haven 1%

I would advice anyone using a broker to check the rate is the best especially anyone proceeding through Haven. It saved me .5% on my rate.

Has anyone else come across this?
 
Last edited by a moderator:
Not much surprising there - my car insurance broker assured me they had the cheapest rate after scanning the market (they purely renewed my exsisting policy - no change of car valuation, no change of points etc), but I got full cover for almost 30% less by ringing around and going alone.

Its worth doing the leg work yourself these days.

With the changes in the market, brokers of all desciptions will feel the pinch and are close on being squeezed out. The internet is a great tool.
 
I think you should report this broker if what you say is true. A broker like this tarnishes the reputation of decent, professional brokers(There are some out there!). Do you remember if the broker got you to sign multiple declarations for each lender when you completed the application? If he just got you to sign the Haven declaration it would point to him trying to railroad you to one lender, if he got you to sign multiple decs than he could have been waiting for a reponse from some of the other lenders.
 
cjh said:
I don't want to report him to ifsra because it is a small office in a country town & i will see him every week, but i wont be referring business to him!
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If you don't want to report him, fair enough, but I think you should still put your complaint in writing to him. Ask him to acknowledge your letter and to reply as he sees fit. If he has any integrity, this should teach him not to do this sort of thing again.
 
I really don't understand why anyone would use a broker in the first place. I struggle to see what they "get" for someone that you can't get by taking a day off work and making appointments directly with the mortgage lenders themselves. Banks are not going to lend you anymore money just because the request came via a broker as opposed to a person sitting opposite the mortgage advisor in the branch
 
PatriciaFox said:
Not much surprising there - my car insurance broker assured me they had the cheapest rate after scanning the market (they purely renewed my exsisting policy - no change of car valuation, no change of points etc), but I got full cover for almost 30% less by ringing around and going alone.
Click to expand...

Only 30% ;). I got the same great letter from my online car insurance broker. I reduced mine by 40% by reapplying online with the same company! Plus an extra €50 off again when I rang them in person, before I could even give out to them!! :rolleyes:

Towger
 
Thanks for your comments. I put my complaint in writing to him. Awaiting a response... I think a few mystery shoppers from IFSRA are probably needed..
 
Mpsox said:
I really don't understand why anyone would use a broker in the first place. I struggle to see what they "get" for someone that you can't get by taking a day off work and making appointments directly with the mortgage lenders themselves. Banks are not going to lend you anymore money just because the request came via a broker as opposed to a person sitting opposite the mortgage advisor in the branch
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Hi Mpsox

Is this from personal experience. I work as a broker and just to state I seek out the best possible deal irrispective of commission amounts. When dealing with a broker you are usually dealing with someone who knows the mortgage process inside out. I tested this idea when my girlfriend and I arranged an appointment with EBS. I knew there criteria better than their advisor did. My girlfriend being a teacher under EBS criteria they would allow their assesment on the basis that she would move 2 points up on her pay scale. The EBS rep didn't offer this. I also knew that they would allow for room rental on 2 bedrooms in a 3 bedroom house. Both these points were very significant when it came to the amount that my girlfriend was seeking.

All the EBS rep wanted to do was get her to sign up to life assurance. This was where she put her emphasis. At the end of this the rep was to call us and come back on one or two queries we had. 100% verses 95%. This didn't happen. We called her and she advised that she was waiting for word from an underwriter. We haven't got a call back to this day.

Basically what I'm trying to say is that brokers are necessary. They live and breathe mortgages and know where upon research where to place a mortgage for the best deal.

Integrity is very important. The cheapest is not always the best. But when it comes to interest rates I try to steer to the lowest(fixed or tracker depending on preference).

Commission rates should not come into the decision and the client should have been given all the available options(AIP's rate's etc)

Jonny
 
bb1000 said:
I recently approached my local mortgage broker to get advice in relation to purchasing a property at a discounted price from a family member. I was not sure if banks were willing to finance such a mortgage & had been advised that a broker would be the best option. Another family member recommended this broker as they had used them in the past.
I was advised by the Broker that this was possible and he would proceed to forward my application to a number of lenders. The broker got back 2 days later with approval from Haven (seemingly the broker brand of EBS) & also advised they had the most competitive rates.. Delighted with the approval, Mr. Broker advised the property valuation had been instructed. Great... While waiting for my loan offer to arrive I checked the rate quoted on the property supplement & found my rate was not the most competitive. I contacted the broker the next day & was informed that Haven were first to approve & the other banks required further information. I then walked straight into my nearest first active branch (as i was looking for the best 5 year fixed rate) with exactly the same information & received approval two days.
I went back to the Broker & he was furious.. He again advised the loan offer was on the way & did not advise I change. The difference means 1000 euro over the year on my mortgage & I informed the broker i was not proceeding with Haven & didn't feel i got independent advice.

Seemingly Haven are one of the few lenders who are still paying 1% commission to brokers. Clearly he was chasing commission. I don't want to report him to ifsra because it is a small office in a country town & i will see him every week, but i wont be referring business to him!

From what I could find online, a number of banks have changed their commission structure to brokers:

BOI .5%
ICS .65%
First Active .5%
Bank Of Sotland .8%
AIB .5%
PTSB .5%

Lenders still paying full commission to Brokers:
IIB 1%
Haven 1%

I would advice anyone using a broker to check the rate is the best especially anyone proceeding through Haven. It saved me .5% on my rate.

Has anyone else come across this?
Click to expand...

Hi bb1000

My advice is chase him to get you an offer with FA. If not go to FA direct or to another broker. Commission's have been cut by banks but this SHOULD NOT impact BEST ADVICE.

My advice is run a mile form that individual, unless he can provide valid reasons in writing as to why the other lenders didn't approve

Best of luck

Jonny
 
JWMB said:
Hi bb1000

My advice is chase him to get you an offer with FA.
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Why would the original poster go back and give the broker another chance to earn commission ?
What exactly does the Financial Regulator do to check up on brokers etc? How do they know if brokers are picking the best mortgage for a client? Do they check up on them? Are they randomly audited or is is just a matter of waiting for complaints from customers ?
 
irishlinks said:
Why would the original poster go back and give the broker another chance to earn commission ?
What exactly does the Financial Regulator do to check up on brokers etc? How do they know if brokers are picking the best mortgage for a client? Do they check up on them? Are they randomly audited or is is just a matter of waiting for complaints from customers ?
Click to expand...

The original broker would still have there clients docs and from my interpretation the mortgage isn't complete.( If I was not given best advice and was aware of it I wouldn't complete the mortgage) For speed the client could demand that the broker went through with another application with another bank.

Also I offered two other options aswell i.e. another broker or FA direct.

It's a matter of waiting fpr complaints from customers usually( where theres smoke theres fire)
 
I am curious if the OP had a response from his broker yet as I suspect my broker has also chased commission and has not sought the best deal for me, I was also disappointed at the number of times I called with questions and looking for feedback etc and had to keep chasing for answers, they never called me until I did some chasing.

I didn't feel that particular broker did anything to deserve his commission so I have since done my leg work and found a better deal, albeit for now, things change quickly. Also the better deal (Halifax) doesn't deal sith brokers.

I've asked for my original documents back to make other application and hope he will be quick about returning them.

He'll get a wee commission from the mortgage protection and buildings/contents insurance and that will have to do him.

Betsy
 
the disappointing element of this story would be if the broker held an agency with first active, brokers can't actually advise on lenders they don't hold an agency with, if that was the case then he can't be faulted for not advising on them any more than with NIB who don't use brokers, however if he did have the agency and you fit their criteria (as you must given you got approval directly) then it's an example of a person not doing their job, and that's unacceptable in any industry
 
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