Some time ago we were required to refund our small development. We approached several brokers over a 12 month period and finally one broker came through with a mandated letter of offer from a funder. So we duly filled out the paper work and paid our fee 5k+ and sent it off. One month goes by and it appears the funder has no funds but has collected our fee, according to the agreement there's a scale of refund.
So we sent off our request to the broker and to cut a long story short after many phone calls and emails hes still looking into it and several months have passed and to make it a bit more difficult he is in Victoria and I live in NSW.What would you do?
are you sure they aren’t based in Nigeria?
neil mackay wrote:Some time ago we were required to refund our small development. We approached several brokers over a 12 month period and finally one broker came through with a mandated letter of offer from a funder. So we duly filled out the paper work and paid our fee 5k+ and sent it off. One month goes by and it appears the funder has no funds but has collected our fee, according to the agreement there's a scale of refund.
So we sent off our request to the broker and to cut a long story short after many phone calls and emails hes still looking into it and several months have passed and to make it a bit more difficult he is in Victoria and I live in NSW.What would you do?
What does your agreement say?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Neil,
The broker is not based in Sth Yarra by any chance are they?
There are a lot of brokers that ask for large upfront payments, claiming they are for the lender, after issuing an expression of interest. If they have not disclosed who the lender is you can be pretty sure their isn't one. I suggest you ask them to disclode who the lender is and also to show proof that the money has been paid to that lender. If the lender has accepted money then they should have ordered a valuation or done something, ask for evidence of this.
If they won't provide this info I suggest you complain to COSL as a first point of call, amnd mayby the MFAA or FBAA, whichever they are a member of.
It is an acceptable practice to charge an upfront fee. We charge a small upfront fee against an indicative terms letter as there is a lot of work goes into preparing a development application and there are a lot of developers who shiop their deals around and/or do not disclose issues such as credit file problems or a lack of further equity/cash that can kill deals after all the work has been done. However, we refund this if we fail to come up with a formal offer from a lender.
Regards
Alistair
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