How to claim back hidden broker fees on mortgages and loans
If you have taken out a mortgage, secured loan or another form
of finance such as a car loan, in the last 12 years then you may
have been an unwitting victim of dishonest "secret" broker
commissions.
These secret commissions are payments made by lenders to brokers
on top of the usual disclosed broker's fee to ensure that the
broker sends borrowers the lender's way; in essence it is a
bribe.
Obviously brokers are entitled to commission as that is how they
make their living, but if they are offered an additional and
undisclosed commission from the lender then it inevitably creates a
conflict of interest.
The incentive then for the broker is to arrange a finance
agreement that secures them the most profit regardless of whether
that product is actually suitable for the borrower or not - meaning
that the borrower loses out financially at the expense of the
broker.
Also, if a broker fails to disclose all the fees and commissions
involved in a mortgage or secured loan transaction then they are
breaking their fiduciary duty. In other words, they are breaking
the law and the whole agreement can potentially be rescinded (or at
the very least all fees separate from the capital amount can be
refunded.)
Secret commissions are predominantly restricted to the sub-prime
(bad credit) market as this area is less regulated, particularly
where secured loans are concerned, than the prime market where it
is against regulations for any broker fees to go undisclosed.
Before the recession, the sub-prime market was extremely
competitive and so secret broker commissions were rife as lenders
were desperate to attract business. Potentially thousands of
borrowers were given unsuitable and fraudulent mortgages or loans
as a result.
So if you know, or suspect, that your broker received a secret
commission for arranging your mortgage or secured loan then read
the rest of this guide to find out how you can potentially claim
compensation.
Claims Financial