In a letter from Caroline Marsh, director of intermediary mortgages at RBS, brokers were told they could now add arrangement fees onto the loan but if the client: ‘subsequently decides to withdraw their application, we will collect the fee using the bank account details or the credit/debit card details entered on their application’.
While intermediaries have acknowledged the move could help put off people who are just testing the water, there were concerns that many who are caught up in circumstances beyond their control could be drawn in and be forced to pay up.
Danny Lovey, sole trader at the Mortgage Practitioner, commented: “I wouldn’t blame them for saying if you mess us around we will collect the arrangement fee anyway as they are wasting everyone’s time. However, what about the person whose chain breaks down? If it’s not the buyer’s fault, it sounds like RBS will collect the fee anyway. It seems very black and white.”
James Carter, principal at Independent James, believed it was another example of lenders targeting customers over fees.
“It does appear lenders are getting greedier. Fees have been increasing but they have also been reclaiming as much as possible. It’s not just arrangement fees either but exit fees, for example, as well. This is really hitting the clients.”
However, a spokesperson for RBS Intermediary Partners said the lender was realistic and would not take money every time: “If the applicant chooses to add the fee onto their mortgage, and subsequently decides to withdraw their application, we will collect the fee from the nominated account. Of course, where the applicant has had to withdraw their application for reasons beyond their control, e.g. where the property purchase has fallen through, then we will not debit the fee.”
