Mortgage advisor demanding a fee, although we are not going ahead

I

iamgall

Guest
My wife and I are renting a flat that we were planning to buy in a few months. A price had been agreed between the seller who is also our landlord and us, and we had found a mortgage through a mortgage advisor, who was working for the seller and ourselves. We then hired a soliciter who went ahead and ordered the conveyanceing which was £300.

We have this week decided not to buy. We have not signed anything and just agreed a price through e -mail with the seller. However the mortgage advisor, who found us the mortgage with Halifax, is still demanding to be paid his fee of £250. He has my passport and has said there will be a sort of exhange when his fee is paid. Is this ethical? And do we have to pay his fee if we are not going to use the mortgage?

Also, will we have to pay any more solicter fees, as we phoned and put them on hold? They said no additional work has been done by them when we did this.

Any more advice on this situation would be much appreciated, and as first time buyers we feel we have been somewhat easy meat to the sharks.
 
Re: advice on sharks

Thats seems a bit much. Normally mortgage brokers dont charge a fee for their services because they are usually picking that up from the commission on your mortgage! That said I still have never heard of one saying they want to be paid for the work they've done to date essentially!

I am thinking that when they began to advise you the first thing they are obliged to do (officialy anyways) is to provide you with their Terms of Business which outlines their fees, who they deal with etc. If this wasnt the case when you started I would be off to the Regulator next and report them. Though you might just want to threaten them with that first to try and get the passport back. Why did he have that anyways? Its unlikely that they will want to be reported and should just drop it!
 
Re: advice on sharks

A passport is not your property afaik, but that of the state - him withholding a passport is a fairly serious crime if reported by you.

Regarding the fee, that's another issue.
 
Re: advice on sharks

iamgall

You refer to £ , as distinct from € in your post.

Are you based in Ireland or the UK? If you are not based in Ireland, the custom and practice is different from that in the UK.

brendan
 
If you engage a professional such as a mortgage advisor, estate agent or lawyer and you proceed right to the point of transaction and then back out, I think it is then ethical to pay your professional fees as if the transaction had been completed. The work has been done by your advisor; you just decided not to proceed.

Retaining the property of someone who owes you money is a 'lien' and is normal practice in the car maintenance industry for example. Whether it is legal in this case is another matter. I don't know.

I believe the ethical thing to do in a situation such as this is to offer to pay your advisors a fee based on their time invested in your failed transaction.
 
No offence but your advisor would have spend time on getting your mortgage approval, they would have been paid for that service from the lender if you had of proceeded, however you backed out of the deal (which you are entitled to do) however at that stage a lot of time and efford would have been spend by your broker to get you that far. Where I do not agree that they should hold your passport to ransom, I do fully agree that the broker should be paid, as he took you on as a customer in good faith
 
I used to be a broker and I had to put it in my T's & C's that if we arranged borrowed what a client requested and they did not proceed we would have to charge a professional fee. People used to take the p!ss and come to us to see how much they could borrow (to chat to their mates about down the pub) without any intention of buying so we had to protect ourselves from these timewasters. If he has done the work and you are pulling out you should pay the man. €250 wont even cover the time he put in. Would you work for free??
 
Give him 24 hours notice to return your passport and tell him if he does not comply you will inform the police.
 
The passport thing is the sinister bit here. Go into their office and get it back immediately. Then you can look into whether you're obliged to pay.
 
It's only fair to pay a business for the time and work they undertook on your behalf. However, the passport issue is outrageous. Demand it back, but be fair and pay the broker. In this case, I would ask for a reduced fee, just on the basis that they messed about with your passport. That's not on.
 
I purchased my house through a mortgage broker 3 years ago. He advised me from the outset that there would be no charge for his service. However, the mortgage provider,one of the large Irish banks,slapped a fee of euro 1900 on to my bill. When I queried it - I was told it was an administration fee. At the time I had a lot going on, and even though I was not happy with the fee I paid it, because I felt at that stage if I was to look for a new mortgage provider - the house purchase would be delayed. At a later stage I decided to query the fee further and contacted the office of the Financial Service Ombudsman. They investigated the case for me and concluded that I had no case as it was part of the Terms and Conditions of the bank. I have to say I am still very unhappy as those terms and conditions were not explained to me. Would I still have recourse on this issue.
 
If you took your complaint to the Ombudsman, this also indicates that you exhausted the formal complaints procedure of the bank. Having said that, the Ombudsman's decision does not prejudice your right to take a private legal case if you want. But I suspect that it might be an expensive process which you might or might not win and if you don't the cost would presumably be well in excess of €1,900.

Was the €1,900 fee mentioned on your loan offer?
 
id be interested to know if it was a subprime lender charging that fee as ive never heard of one of the main banks charging that amount?
 
holding your passport until you do some kind of 'exchange' sounds like a ransom approach, and its totally illegal, however, that aside, if you agreed to a fee and signed anything to that effect then you will be liable for that fee, even if you didn't go ahead.
 
DerKaiser said:
The passport thing is the sinister bit here. Go into their office and get it back immediately. Then you can look into whether you're obliged to pay.
Click to expand...

Totally agree, as stated earlier a passport is property of the State. Why on eath did you give your passport rather than a photocopy? In any case, threaten the Gardai, who should be rightfully involved if he refuses to return it.
 
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