Poll question: Would you charge a cancellation fee?

Poll question: Would you charge a cancellation fee?

Poll question: Would you charge a cancellation fee? Have your say: Would you consider charging a cancellation fee for rate site clients?

Rate sites and cancellation fees are nothing new but one leading broker has merged the two with his new website that allows clients to self-direct the mortgage process but may also charge them a fee for fleeing.  

“On the DIY model, a $295 cancellation fee may apply where folks request an approval, we obtain that approval as instructed, and then the individual cancels the mortgage application,” Rob McLister said of his IntelliMortgage website.  "In practice, cancellation fees are rarely charged … but they serve an important function in offsetting processing costs and maintaining lender efficiency ratios, both of which help us deliver the best possible rates to consumers."

It drums up an interesting debate and it begs the question: If you use rate sites do you believe cancellation fees are a good way to recuperate for lost time in the wake of a fleeing client?

Click here to have your say.
 
14 Comments
  • Cheryl 2014-03-25 11:48:19 AM
    Absolutely. Mortgage brokers should charge cancellation fees only after the client has signed a commitment. If we did this as an industry practice it would be a great idea. Nothing is more frustrating than a client cancelling for an extra tenth of a point after all the work has been done by the broker. Most clients value the work we have done however you do get the odd few that do not value what signing a commitment means. We are professionals and should be respected as such. If you cancelled a deal with a lawyer's office you would still get charged for the time the office has spent working on your file.
    Post a reply
  • Christopher 2014-03-25 12:31:18 PM
    In the 'old' days we had the client sign what was essentially a contract that laid out the deal with an interest range and disclosure of all fees. If the deal was obtained as disclosed, the client was responsible for the broker and finders fees, whether or not they signed the lender commitment.
    Post a reply
  • Mike Maguire 2014-03-25 2:40:28 PM
    Totally against it. If you are a decent broker you should not even have to do it. Times I have run into seeing these contracts the broker was not looking after the clients interest. For example taking client to another lender when porting the existing made more sense. Turning an A deal into a B deal. Going to the lender who pays them the most rather the then the best lender for the client. I think these fees are just a money grab from greedy brokers. Brokers who just deal on line and create no relationship as they never meet the client and listen to them. Then they are shocked when another broker walks away with the deal. See it all the time here, great rate from some broker in Toronto, but they missed porting the CMHC premium. $5000 error and they think that they should get compensated when the client leaves them. Why do these brokers think they are that special? Other problem is disclosure. Website says service is free, no fees then surprise after they sign some form that it takes a lawyer is understand. Personally I think CAAMP should take a stand and make fees like this unethical unless it is spelled out on all advertising in as no where do they say their services are free. Our brokerage will never participate in what I consider an unethical money grab.
    Post a reply