'Non-Refundable Mortgage Booking Fee'?

[Stiched_up_like_a_kipper]

I recently applied for a mortgage with Abbey and paid the 'Booking Fee' up front to avoid paying interest on this amount as well as the mortgage. Everything was going fine until the valuation of the property came back requesting a full Structural Engineers Report, which we duly had carried out. We satisfied ourselves afer speaking to our structural engineer and reading his report that there was little to worry about - however, Abbey's valuer had other ideas.

 

To cut a long story short, Abbey terminated the application and kept my 'Booking Fee' (I have since gone with a different lender who's valuer didn't even ask to see the SER).

I have complained to Abbey and at both stages of Abbey's complaints procedure, have been told that the fees are clearly non-refundable, this last time they have sent me a cheque for £30 as a good will gesture for my spending so much time on the phone.

 

My question is should I go to the Financial Ombudsman or just threaten them with legal action (LBA) as I think that surely this must be a breach of the Unfair Terms in Contracts Regulations?

 

Does anyone have any insight/experience with this type of thing?

 

Thanks

[Hobbie]

If it was "clearly non-refundable" as Abbey say, and you where happy to pay and sign some agreement, then the bank is quite right to keep the booking/arrangement fee.

 

As you state that another lender who didn't ask to see the SER, that is not relevant, as each lender on the market have different policies.

 

If how ever, you were not told and haven't signed anything that would be a different matter, and possibly have a claim against Abbey that you were not informed of the "non refundable" part.

[Stiched_up_like_a_kipper]

It was made clear that it was non-refundable, but surely that doesn't stop it from being an unfair term within the contract, specifically as I did not terminate the application but Abbey did - in fact I gave Abbey two oppourtunities to complete the process to which they declined.

 

If I had pulled out for whatever reason then sure, I have terminated the 'contract' so would expect to forfeit the fee.

[gizmo111]

It is not an unfair term, when you make the booking Abbey would have reserved the money, in anticipation that all the checks would have been met and the mortgage granted. Whilst the money was reserved for you it could not be lent to anyone else, this is a fairly common occurence in a special offer limited funds deal.

[Hobbie]

I can understand the frustration, but unfortnately if you we're aware of it at the time you agreed to it.

 

It is similar to;

 

You go to buy a car, you pay a £500 non-refundable deposit, 2 days later you fail to secure the credit with with the dealers own finance or your own car loan, you would not be entitled to the desposit to be returned.

 

Another example could be;

 

You go to let a property at an agents, pay the non-refundable "administration fee" and you fail the reference checks, the letting agent would not give you the deposit back, and no doubt they'd not allow you to rent the property.

 

So long as the organisation made it clear to you that the fee was non-refundable, and you paid and agreed to this, then the organisation has done nothing wrong, regardless of if it was you or them who pulled out of the transaction.

[Stiched_up_like_a_kipper]

I'm sorry but that's outragous.

 

I pay Abbey a 'Booking Fee' for a product in good faith - Abbey change their lending policy and decide not to lend on the property (not me personally, although I would have to re-apply for a different property) - £££ they keep my £1000 booking fee (now increased to £2500) - nice little earner I'd say. Lets not lend anyone any money and get short-term gains from 'booking fee's'.

 

I still don't see how this doesn't fall foul of 'Contrary to the requirement of good faith it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers'?

[gizmo111]

When did they actually change their lending policy?

What does the clause you agreed to actually say?

[Stiched_up_like_a_kipper]

Whilst the money was reserved for you it could not be lent to anyone else, this is a fairly common occurence in a special offer limited funds deal.

 

I'm pretty sure these 'Booking Fee's' were introduced to stop borrowers jumping ship and going to another lender and getting a cheaper deal during the application stage.

[Hobbie]

Did you sign any sort of agreement/contract when paying abbey the fee? If so do you have the papers to hand still, and if so are you able to post it, either typed or scanned? most importantly the section that outlines what is and what is non-refundable.

[Stiched_up_like_a_kipper]

When did they actually change their lending policy?

 

 

I'm not saying they did, but surely it's entirely feesable that they could - espescially if they're having trouble securing funds themselves, they could stop underwriting anything that has even the smallest risk, bang goes my mortgage and my 'Booking Fee' with it. Sounds unfair to me?

[gizmo111]

I'm pretty sure these 'Booking Fee's' were introduced to stop borrowers jumping ship and going to another lender and getting a cheaper deal during the application stage.

 

I remember paying a booking fee of £295 way back in 1995, so it's not something new, all that has happened is the amount has increased.

[Stiched_up_like_a_kipper]

I'll scan and post the documents tomorrow (bit late now). I've quickly looked over the documents and it clearly shows that they're non-refundable, but even so, i still think it's taking the 'mickey'.

 

I know the fees are nothing new, but I have noticed that since the 'credit-crunch' Abbey's fee on the same product has risen from £1000 to £2500 as well as the interest rate going up from 0.49% above BOE to 1.47% over BOE.

[Hobbie]

I've quickly looked over the documents and it clearly shows that they're non-refundable, but even so, i still think it's taking the 'mickey'.

 

If you think it is taking the 'mickey' did you not question it at the time? You knew it was in place, and yet you still agreed to it, now things haven't worked out the way it would have liked, most likely more so for yourself, your unhappy.

 

Always remember though, If your unhappy with any contract or clause within you don't have to sign it, no one forces you to accept the terms.

 

If you feel so strongly about this, then you could of course write back to Abbey giving them some explanation of why you feel you should be entited to receive the full fee paid.

[Stiched_up_like_a_kipper]

I can fully understand where you're coming from Hobbie - yes I knew when I signed the document that the fee's were non-refundable, but I had every intention of completing the process.

 

It never occured to me that Abbey would terminate the application? At every oppourtinity we complied with thier requests, provided them with a full Structural Engineers Report as requested with which their valuer was still not happy, we then had the Structural Engineer write another letter re-enforcing his first Report the Abbey's valuer was still not happy. At no point did the valuer suggest what could be done in order to come to a successful conclusion.

 

This is when Abbey terminated the application. I asked to talk to someone who made the decision and was told that no-one at Abbey made the decision, if the valuer says no, then Abbey say no! There are other points that make me question the Abbey's valuation, but I did not comment on them so as not to delay the process further.

 

Either way, just because I sign to agree to something, doesn't make it fair does it -think about all of us who have signed agreements to current accounts/credit cards and are now getting our charges back.........

[Hobbie]

I fully agree with you. But you need to think about it from both prospectives, step back from it and look at it from a third parties point of view.

 

A contract is both ways, not just one way, If you had pulled out of it then Abbey would of been entitled to keep the fee, as Abbey wouldn't be to happy with you, unfornately its a reverse of that, Abbey pulled out, most likely on advice from its valuers. Abbey as any other lender, have to ensure that the money it loans is going to be used correctly and protect its investment (the property).

 

Now the question you need to ask yourself is:

 

If I knew that the clause was in place regarding non-refundable deposits, and I knew Abbey wasn't the only lender, why didn't I question the non-refundable clause, or; Why did I go with Abbey in the first place.

 

The other asspect is, I'm guessing it was you who approached Abbey for this, and not Abbey approaching you? the terms of contract may be unfair, but you agreed to them.

 

As for the bank charges, that is something totally different, although I know where your coming from.

 

As gizmo stated previously, the bank most likely had every intention on loaning you the funds, and reserved the money for you, therefore making it unavailable to others, Abbey may have had to turn another customer down on this, because it never had the money to loan that customer, therefore Abbey have lost business, so Abbey keeps the non-refundable fee.

 

Remember Abbey are a bank, not a buildings surveyor, so it has to depend on some body else to give them factual information regarding properties, and it would appear that the surveyor advised something, that caused Abbey to not loan the funds.

 

Your surveyor may have found the property acceptable, another surveyor may not.

[Stiched_up_like_a_kipper]

The other asspect is, I'm guessing it was you who approached Abbey for this, and not Abbey approaching you?

 

I did approach them, but only because they advertised

 

the terms of contract may be unfair, but you agreed to them.

 

In the same way we all agreed to the terms of our current account/cerdit cards

 

I've looked at it from their perspective and would have taken a part refund if they had offered it (based on the fact that they have incurred some cost) - however, I'm now disgusted with they way they have dealt with this whole affair and used the fact that I am in a weak position from a negotiation stance since they already have my money and I need to borrow money to buy the property.

 

Also, I'm pretty sure they wouldn't have sent me a cheque as 'full and final settlement' if they didn't already know that they were in the wrong.;-)

[Hobbie]

Kipper,

 

You approached them, so you went in on your own steam, therefore I doubt you we're pressured into signing an agreement and knew the contents of the agreement prior to signing?

 

Bank/Credit Card charges are UNLAWFUL charges applied AFTER the account is opened, therefore it is somewhat different matter.

 

An F&F Settlement, is not in its own right any admission of guilt or wrong doing.

[Stiched_up_like_a_kipper]

An F&F Settlement, is not in its own right any admission of guilt or wrong doing.

 

I agree, but if you put yourself in their shoes, would you give me any money if you thought you had every right to keep it all? Or if you thought you were being unfair, send me a 'goodwill' gesture in the hope I might go away?

 

Bank/Credit Card charges are UNLAWFUL charges applied AFTER the account is opened, therefore it is somewhat different matter.

 

I know only what I've read on the internet about the law, but as I understand it, the only thing that has been decided is that Bank/Credit Card charges are covered by the UTCCR 1999, now it's up to the OFT to decide if they are fair or not (and even this may go to court)?

[Stiched_up_like_a_kipper]

Here's page 3 (the pertinent bit) of the Abbey's offer. What I will say is that nowhere in the offer/T's & C's does it say what happens when Abbey terminate the contract.

 

[Hobbie]

OK You've a copy of the mortgage illustration, which sets out the costs and charges.

 

To me it is simple and straight forward, it is outlining what you have to pay.

 

Booking Fee, and Account Fee. This is done by almost all in the industry.

 

The "Other fees" of £137.88 says it is a non-refundable legal fee which must be paid BEFORE the mortgage starts. This is a fee you have to pay, and it clearly explains what your paying for.

 

Has Abbey refunded the £999.00 booking fee and the £225.00 account fee, and the £30.00 CHAPS transfer fee? or have you not paid this yet?

[Stiched_up_like_a_kipper]

I paid the £999 upfront and Abbey haven't given me anything back

[Hobbie]

In that case it is a different story, but it wasn't fully explained.

 

You are normally entitled to a refund of the amount paid MINUS the legal fee payable to the surveyor.

 

As no account was setup, and no money was ever transfered to a solicitor, you need to contact them and tell them amount paid minues the surveyor's fee is required back within 14 days, send it via registered post, if nothing heard back in the 14 days, also consider making a formal complaint with Abbey (Request a copy of the banks complaints procedures) or go straight in for the throat and send a LBA.

[Stiched_up_like_a_kipper]

My apologies if I didn't make myself clear.

 

I've already made a formal complaint to Abbey. I've followed their complaints procedure (letters back and forth twice now) which has now left me with either contacting the Ombudsman or bypassing them and going straight for a LBA, this was essentially my original question, whether I sould bother with the Ombudsman, or just go straight for the jugular and send a LBA?

[Hobbie]

Kipper, let me appoligises If I misunderstood your original post.

 

As you've gone down the route of the formal complaint, and Abbey still don't want to share the toys with you, you have played fair with them, I would say you should now consider the next course of action, and if that means going for the jugluar then that is what needs to be done.

 

Of course, I can't tell YOU what to do, only what *I* would do, and I personally I'd would be going for the jugular, so long as I thought I'd have a good chance of winning.

 

You can file a claim on line at http://www.moneyclaim.gov.uk/csmco2/index.jsp

[pollo]

I paid £200 non refundable tenancy fee which along the way magically changed to administration fee. I only signed the agreement to let a reference check be made under the tenancy fee. I never got a copy of that agreement. Only after paying the fee was I told about terms and conditions. Now that cannot be fair and must entitle me to have the so called non refundable fee back under some consumer law?