IFA sues lender over failed application

Chris Herbert, a former IFA with The Chancery Asset Management Group, is suing both his ex-employer and lender Capital Home Loans for lost fees totalling nearly £5,000.

Herbert alleges that Capital&#39s business development manager, Ross Turrell, gave assurances that a loan on five buy-to-let properties would be considered using normal underwriting criteria.

The houses were tenanted by a charity to re-establish reformed drug addicts and alcoholics into society. Most lenders approached refused to consider the deal. However, Ross Turrell is alleged to have given his absolute assurances that this would not be a problem to Capital.

But more than three months later, after valuations, accounts and all other criteria were satisfied, Capital&#39s underwriters are alleged to have declined the application because the properties were not suitable security “as they are currently being used as rehabilitation centres for drug and alcohol abusers”.

Herbert sought to recover his costs by claiming the 0.5% introducers fee and the 1% client fee (total £4,830) from Capital. But Capital is alleged to have opted to have made a compensation payment of £320 &#39without prejudice&#39 to Chancery Mortgages. No one told Herbert, who says he never received any of this compensation.

Chancery are also alleged to have retained all of the money with Capital&#39s full agreement.

Capital deny any collusion with Chancery and a spokesman says: “The matter is in the hands of our solicitors who will defend the case on our behalf. Pending the hearing, it is not appropriate to comment further.”

The case is scheduled to be heard at Bristol County Court on August 19.