Is Signed Credit Quote with Clawback Clause Legally Enforceable by The Broker?

Lhothot on 11/01/2021 - 00:07

I ask this in one of the old thread, but I guess, I have better change to get response in a new thread. Also in the old thread, there was no signed evidence.

I had refinance 3 home loans (1 OO, 2 investment) from a broker referred by a friend. After initial discussion, he agrees to cover part of refinance cost to be paid after settlement. During the process he also sent me a credit quote with a "clawback" clause, which I refuse to sign.

I told him I am not happy to commit to keep the loan for 24 months as it's a long period, during which I may sell my investment property or move to a new big house converting my current home as investment or selling that off. I assure him that I will give him the first opportunity to do the business for refinance my loans in future if he can give me a competitive deal when I need to refinance in future.

He verbally assured me that this is just a formality document I need to sign and he believe in long term business relationship where this is not actually enforceable. He says he reviews his all clients account every 12 months and provide best service so clawback is only for 12 months where he himself will encourage to refinance if that is beneficial to do so, and I can sign it without any worry. I was still not happy, so ask him to add a clause that "clawback" is only applicable if I refinance, and not if I need to sell any property.

Now twist in the story, he had left the company he was working (I was in the impression that he owns the company). He has started a new firm and approached me to refinance the loans with his new firm. I remind him about the clawback which I signed and he said, that document is with him only and no need to worry (which I doubt, as I send the signed form through email to old firm, and I am sure they may have it in their records).

I thought to refinance with him, but was not happy with his deal. I got a better deal with another broker and thinking to refinance with another broker.
Now I am worried about the "clawback" clause I signed. Can the previous firm enforce that?

It's now almost 14 months so as per our verbal agreement, I am out of "clawback" agreement, but on paper it is for 24 months.
Do I have to wait for 24 months before I can refinance?

Financial

Comments

  • xuqi on 11/01/2021 - 00:27
    +7

    Verbal agreements don't account for much, you should go by whatever contract you signed.

    Best refer this to someone with legal experience, so they can explain your obligations to you.

    • AustriaBargain on 11/01/2021 - 00:42
      +2

      Verbal agreements are as good as an agreement in writing, but only if you can get the other person to admit in writing that they made the verbal agreement or if there was a witness. If there was no witness or they refuse to acknowledge they ever made the agreement then it's as if the verbal agreement was never made in the first place. But a verbal agreement to invalidate a written agreement is a bit of an odd one. If the agreement was made with this guy's employer and not with the guy itself then it might not matter what the guy verbally agreed to after the fact, if he was not authorised to invalidate the agreement in the first place.

      If I believe there's even a chance the person I'm talking to will deny something later on, I always communicate through email or text message instead. Sometimes your spidey senses tingle and you just know that they will deny it all later on, they will call you a liar and who is to say otherwise?

  • whooah1979 on 11/01/2021 - 00:48

    It's now almost 14 months so as per our verbal agreement, I am out of "clawback" agreement, but on paper it is for 24 months.

    Did you record the conversation?

    • AustriaBargain on 11/01/2021 - 01:01

      He needs to try and trick this guy over email into acknowledging that the conversation actually took place. Something tells me he's a little more experienced at this kind of thing than OP and will smell it coming a mile away..

  • spackbace on 11/01/2021 - 00:54
    +4

    Talk to a contract lawyer, not a bargain website forum

  • spychiatrist on 11/01/2021 - 01:22

    Signed. End of story.

  • TheBird on 11/01/2021 - 02:50

    The guy sounds shady as f**k. Talk to your guy you want to go with (same guy who originally signed you) and discuss, if you're charged the clawback, he pays it. Get it in writing.

  • pndl on 11/01/2021 - 09:00

    Depends on the written agreement. Some follow the broker, some follow the firm. You will find it hard to enforce any Verbal side agreement.

  • bmerigan on 11/01/2021 - 09:04

    If there's a signed contract then that is what you should base decisions on.

  • eddieboy2 on 11/01/2021 - 10:09

    I have been retired two years, but when I was a Broker, the usual clawback was for 12 months. there were some loans around with different clawback periods eg 6 months, 9 months, 18 months, 2 years. I never had reason to realise on a clawback myself.

  • DingoBilly on 11/01/2021 - 10:39
    +1

    Not sure why you signed a document saying you agreed to it, and are now complaining that you think the other guy is at fault here?

    He definitely sounds shady/full of crap, but at end of day - if you are unhappy with a legal document and aren't sure about it you shouldn't sign it. If it was just a formality, then he could have just changed the 24 month period to 12 months after all right?

    But agree with other comments - go talk to a contract lawyer if you are really concerned about it.

  • nedski on 11/01/2021 - 11:26
    +2

    I have taken out a number of mortgages and refinanced a number of them. I have NEVER had a clawback clause in any of these loans with brokers. I would recommend waiting out the 8 months and then just re-financing of your own accord. This guy sounds as dodgy as hell so cease doing business with him.

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