Mortgage adviser ordered to ‘stand by its promises’

Mortgage adviser ordered to ‘stand by its promises’

Connells has been told to refund a female client’s mortgage advice and administration fees of £598, plus interest, because it ignored her needs when trying to sell her a mortgage.

The client, known as Mrs D, wanted to buy a second property for a family member to live in, with rooms rented out to friends.

She paid Connells fees for mortgage advice and administration, but the firm kept telling her to get a mortgage for the second property, rather than remortgage against her home as she wanted to do.

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Mrs D said Connells advised her to get a buy-to-let mortgage, despite such mortgages generally not allowing family to live in the property. She also claimed the mortgage adviser did several credit checks without her knowledge that affected her credit rating.

In the end, Mrs D did not get a mortgage with Connells and claimed the adviser agreed to refund the fees, but then failed to give her cash back.

Connells responded that Mrs D had initially said a family member would not be living in the second property, which was why it recommended the buy-to-let mortgage. The adviser said they only found out later that Mrs D was also going to let out rooms in the second property, which was why the second mortgage application was unsuccessful.

Connells argued it was Mrs D’s choice to go elsewhere, even when it found a suitable mortgage for her home.

Mrs D slated Connells’ claim that they were unaware the property was for a family member and added she had a recording where Connells promised to refund its fees.

Ombudsman Claire Sharp upheld Mrs D’s complaint, stating that her version of events makes sense, while Connells’ documents were not as persuasive.

“Even after receiving an email from Mrs D, it completed documents saying the property was a buy-to-let; I would expect mortgage advisers to know if a family member is going to live in the property, this can be a breach of many buy-to-let mortgages.”

She pointed out that a mortgage adviser should explore in detail the purpose of buying the second property in such circumstances.

“I can understand why Mrs D lost trust in Connells and was unwilling to continue to use it. I also agree Connells said it would refund the fees, and didn’t. I think it is fair and reasonable to expect Connells to stand by its promises to consumers.”