Money For Old Rope for Mortgage Lenders??

[chrissa1]

I posted a question about this point a couple of days ago and two abers told me that I could only get the �5000.00 returned to us if that is what their Terms & Conditions that we signed said was allowed.
Am I being naive and stupid, but we signed this document and paid them the �5000.00 because we were CONVINCED that the deal was going to go ahead! Everything was going swimmingly and then they pulled out at the last gasp. To my mind that is a very good way for Mortgage Lenders/Banks making a mint of money by doing absolutely nothing. "Money for old rope".

[factor-fiction]

You'll need to tell us why they decided to pull out.
What was the �5000 for?

[chrissa1]

I can't remember the actual reasons as it was over 2 and half years ago. There was no reason like non disclosure by us and the �5000.00 was like an "arrangement fee".
I need to get the correspondence out don't I ?

[Ethel]

It is standard practice:

"The charging of arrangement fees by lenders has become increasingly common over recent years. Most lenders will now charge an arrangement fee, particularly if you are looking for a fixed or discounted mortgage. These can vary from a few hundred pounds up to a full 1% of the mortgage amount (occasionally even more). Some lenders will ask you to pay this fee up front when you submit the application, others will add the fee to the loan. You should always find out at the outset what terms apply to the arrangement fee and ask if the fee will be refunded if your application does not proceed for some reason (some lenders will wish to hold onto the arrangement fee even if they decline your application). If the fee is to be added to the mortgage then remember that you will be charged interest on this for the term of the mortgage - you may prefer to pay the fee on completion so ask if this is possible."

http://www.moneynet.co.uk/mortgage-guide/mortg age-g03.shtml

It's too late for you now - but always, always read the small print and make sure you understand what you are signing

[sandmaster]

As factor says - it all depends on the reason for them withdrawing their offer.

[Twenty20]

Read the details of the T&C before you sign anything, not afterwards. Sorry if its not much help but if the fee is non returnable there's not much you can do.

[factor-fiction]

Twenty twenty: is that the case though if you can show it was an unfair contract term or it was a missold fiancial product?

[chrissa1]

Good Thinking factor30.

[themas]

You really do need to look carefully through all the small print. On the face of it, it is unethical for them to take a large "arrangement fee" & then withdraw from the arrangement the fee was in respect of without returning the fee. (This assumes absolutely nothing changed in your circumstances or the information they had about you which could have caused them to withdraw.)

However, if that is what the small print of the contract you signed says, I think it is unlikely you can do anything about it unless - as factor30 says - it can be shown to be an unfair contract term. You would need legal advice about this.

[sandmaster]

themas is right - but in essence it depends on why they withdrew. If it was something that puts the blame in your court then you have little likelihood of getting your money back.