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Broker Your Mortgage Decisions closed under fee pressures owing £1.2m

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  • 20/06/2024
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Broker Your Mortgage Decisions closed under fee pressures owing £1.2m
Your Mortgage Decisions, previously run by directors Dominik Lipnicki and Martin Wade, has gone into administration, owing more than £1.2m to creditors including mortgage brokers.

Your Mortgage Decisions had been charging its customers up to £3,995 for a lifetime remortgage service up to six weeks before telling staff by email that it was preparing to go into administration, Mortgage Solutions understands.

A source told Mortgage Solutions that following pressure from Lloyds Banking Group and Santander to reduce its fee in light of Consumer Duty regulations, Your Mortgage Decisions lowered its fee to around £800 from 31 July 2023, when the new rules came into force.

However, it is believed that the lifetime fee remained the same for borrowers placed with other lenders until Your Mortgage Decisions stopped accepting new business.

 

Your Mortgage Decisions closing down

The company, which also traded under the name Access Equity Release, notified staff on 12 January in an email seen by Mortgage Solutions that it had decided to instruct an insolvency practitioner. M.R. Insolvency was appointed on 4 March.

Wade and Lipnicki have also put their wills and estate planning company Fielding Triggs LLP into liquidation owing creditors close to £1m.

Meanwhile, The Remortgage Business, a trading style of Your Mortgage Decisions and last active in 2010, was resurrected in November 2023 under a different company called Eadon & Co.

The Remortgage Business, which according to its website charges £795 for advice, remains registered at the same address as Your Mortgage Decisions. As of 19 June the company had a live website.

The company’s telephone line has an option for Your Mortgage Decisions borrowers who have a question about their mortgage.

 

‘Legal and regulatory threats’ to Your Mortgage Decisions

Lipnicki, who filed for bankruptcy at the end of January, stated in his email to Your Mortgage Decisions staff that it had been their goal to run the business with as little cost as possible, to look after its clients and deliver as much of the pipeline to its advisers as it could.

He added that the company had suffered legal and regulatory threats over the weeks leading up to the closure that had intensified. This, he wrote, had meant their planned course of action had been taken out of their hands.

 

Brokers and staff out of pocket

According to the insolvency statement of affairs, there were 138 counts of commissions and clawbacks owed totalling £645,243.19.

A further 14 counts of redundancy and payment in lieu of notice (PILON), where staff members have been let go immediately but are still owed payment for their notice period, come to £40,962.

On the list of creditors the amounts owed to individuals ranges from around £50 to £27,930 while HMRC is owed £169,560.

Most of Fielding Triggs’ creditors are individuals owed fixed sums of £3,495, £1,645 or less. HMRC and the Office of the Public Guardian have been left £236,260 and £23,247 out of pocket respectively.

 

Resignations and restructures

In September 2023, seven months before officially appointing administrators, the pair made several changes to their companies.

On 4 September 2023, Lipnicki resigned as a director of Your Mortgage Decisions, according to Companies House, but remained a director of Fielding Triggs which is now in liquidation.

Just over a week later, Access Equity Release ceased to be a trading style of Your Mortgage Decisions and on the same day was transferred to Eadon & Co where Wade is approved by the FCA to advise on or arrange equity release mortgages.

From November 2023, Eadon & Co also became the parent company for the trading style The Remortgage Business. Wade resigned from Fielding Triggs in October 2023 leaving Lipnicki as the sole director.

Wade emailed staff on 9 January to let them know they would be placing the firm into administration. He also said that Lasting Power of Attorney (LPA) documents for clients would be produced but not registered stating: “Money, there simply isn’t any,” and “The cost of registering them is sadly prohibitive.”

According to Age UK it costs £82 to register an LPA.

 

Remortgage for life

Your Mortgage Decisions operated a fee structure that saw its borrowers charged up to £3,995 for a remortgage with the promise that their Your Mortgage Decisions broker would continue to monitor their loan for its lifetime. A remortgage would be offered when the company could save them money.

Trust Pilot reviews, which overall were positive and scored highly, continued to be posted in the final months of 2023 from customers thanking Your Mortgage Decisions for finding them a mortgage and discussing the future service.

Posting about her experience on 25 October, Laura Wilkie says she’ll never use another broker again at which Your Mortgage Decisions replies it will ‘hopefully’ continue to help her out.

A month later customer Wayne Heath, posting about his experience on November 28, 2023, said: “Really happy with the ease and speed of the whole process which seemed so daunting before Lee got involved. We’ll look to stick with him for years to come.”

The Your Mortgage Decisions team responded by saying: “… we look forward to working with you again in the future,” two months before deciding administrators would need to be appointed.

 

Warnings over Your Mortgage Decisions’ closure

But disgruntled individuals took to posting warnings on the review pages to let borrowers know the company was in fact shutting down.

In a review that has now been taken down from The Review Centre posted on November, 29 one customer said his broker, after “dodging calls for days”, had finally admitted that the company was shutting down and that the director had already resigned.

Two further reviews left by Joseph Ham on Trust Pilot in January and February entitled “Closed, where’s my money?” and “Bankrupt” talk about how staff have been left unpaid and “on the breadline”.

 

Lenders take action

Mortgage Solutions understands Your Mortgage Decisions was charging borrowers up to £3,995 until July 31, 2023 before lowering it. “Effectively Consumer Duty put an end to it,” said a source close to the company. “Lenders threatened to take them off the panel.”

They added: “In the case of Your Mortgage Decisions, Consumer Duty did its job perfectly. How in all honesty could any responsible financial services person with a customer’s best interest at heart say that a broker fee of £3,995 provides fair value.

“The Your Mortgage Decisions practice was to charge this fee 100% of the time pre- and post-consumer duty unless the specific client circumstances meant the case could go nowhere else but Lloyds Banking group or Santander. In which case they could only charge what those two lenders demanded, which was the fair fee of £795.”

They added: “There are thousands of well-run businesses that have thrived through the implementation of Consumer Duty, which looked at and bettered their business model in many cases.”

According to a Freedom of Information request made by Mortgage Solutions to the Financial Conduct Authority (FCA), the average broker fee charged for a mortgage is £200.80. This excludes second charge and lifetime mortgages.

Halifax is one of the biggest lenders to declare a cap on the fee brokers charge for selling its mortgages of 1% or £1,500 – whichever is greater.

A spokesperson for Halifax said: “The Fair Value assessment is a key part of Consumer Duty and we are committed to working with the distribution chain for the benefit of customers”

A Santander spokesperson said: “Santander is committed to ensuring our customers are delivered value for money when taking out a mortgage through a broker. When a broker fee is higher than expected, we will check with the broker to ensure the fee listed is correct and if needed, ask to review a copy of their Fair Value Assessment to ensure the fee is in line with Consumer Duty principles.”

Equity Release Council membership

Since Mortgage Solutions began investigating Your Mortgage Decisions’ closure and approached the Equity Release Council for comment, Access Equity Release has been removed from the members section of the website.

A spokesperson for the Equity Release Council said: “It’s not uncommon in financial services for a trading style to be transferred from one regulated parent firm to another.

“However, the Council will always investigate if any member firm or connected trading style is alleged to have fallen short of our expectations.

“Membership will be suspended during any investigation.”

A spokesperson for the FCA said: “Firms must put the consumer at the heart of everything they do, provide products and services with fair value and support people to pursue their financial goals.

“If a customer is owed money by a firm that has gone into insolvency, they should try and contact them directly or contact the FSCS.”

Wade and Lipnicki did not respond to questions from Mortgage Solutions.

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