Claw backs.

Agreed Terry. I replied promptly to the request for payment explaining the reasoning for my course of action. Again, no response. In Brokers defence it was a Friday afternoon. But it allows the weekend reprieve to gather information.

 

I know I sign something with my broker in regards to claw back but I think it's fair enough as he's good to me and if I refinance he won't get paid. I would personally still pay my broker whether I've signed something or not but can understand if he's being slack and unresponsive.

 

Some are fair others are not. I refinanced a client - not even a refinance but an internal restructure - and therefore the previous broker will lose the trails from that point onwards. Client tells me he made her sign a document agreeing to pay him a sum of money should she do this within the first 3 years or so - even though there is no clawback suffered by the broker.

Clawback is generally 100% if the loan is discharged within the first 12 months and then it slowly reduces month by month to nil at 18 months (varies between lenders).

 

Lesson here :
1. Read contract before signing;
2. Retain a copy of agreements you sign.

I know most banks impose early payout fees. Actually many don't "impose them" but defer upfront fees like application fees when the loan is drawn. If a qualifiying event occurs (ie loan refinance / payout) within x years (often three) then the agreement stipulates how much gets reimposed. A bit like a phone contract.

Now you don't see Optus or Telstra dealers chasing a phone owner for the trail when the contract gets rewritten elsewhere. Or they don't spend enough. Leave the country etc.

However the deal with the broker would need a separate commission and even then it may be argued the brokers fee agreement is with their aggregator / lender unless there is a very clear and explicit agreement between broker and client. It may be unconscionable to chase the borrower to impose a recovery of future expected fee income.

http://www.news.com.au/finance/busi...ian-consumer-law/story-fnkjidjt-1227052306098

 

Bank early pay out fees have been banned for years now. There are small fees of around $300 for the discharge of mortgage but no more deferred establishment fees etc (these used to be thousands!!).

 

I charge a $700 clawback fee refundable or not charged if I do further lending of similar value within 6 months of the clawback. All in all I think to totally reasonable.

Over the last 5 years I've had 3 clients pay the fee and one client refuse to pay it even though I did a good job for them and was a lot of work (trust loan).

I'm not going to sue anyone for it but by the same token I won't do business with someome who refuses to pay it either. Their loss my gain. The guy was a small business owner too so you'd think he would understand no one can work for free.

If I hadn't done a reasonable job and I knew it I think I'd just not send the invoice which by the way I accompany with copy of the client signed agreement.

 

Marty that sounds very reasonable and fair to me

 

$700 is reasonable to me. Could this be tax deductible?

 

Yes, if the loan was used for investment.