why is the lender asking for this info?

smnb08

my broker has come back to me today to say the lender i am trying to remortgage with wants my current lender(kensington)to write a letter to them to say they have never started repossesions against us.
about 2 years ago they did as we were nearly 3 months behind on the mortgage i contacted them straight away and was told a date had been set for a court hearing and the only way i could avoid it was to bring the arrears down to under 1 month before the court date.
we did do this and then made an arrangement with them to clear the remaining arrears.
so i am guessing that even though it never got to court kensington will not write a letter to confirm what they want.
how is this going to effect the application?? i am thinking big time!!!

_Andy_

Did the broker/packager not disclose this on the application?

smnb08

im really not sure im thinking not.
i did have a look at the beacon application form online last night and there is no one question where i can think she would of put it.
what i mean is there are two questions on there
have you had more than 1 months arrears in the last 12 months
have you ever been party to a mortgage where the house has been reposessed
also states in the underwriting bit that any mortgage arrears over 12 months old is ignored.
maybe this is why she didnt disclose it because it wasnt asked ?

dunstonh

If they are the questions then the correct answers were given (assuming the arrears from 2 years ago were made up and the mortgage is no longer in arrears and hasnt been in the last 12 months).

However, as part of the underwriting of a mortgage the lender can decide to ask for more information or clarification. This tends to be on cases which are borderline or where there may be inconsistent data or they think the information given is not correct.

smnb08

just phoned kensington and the lady i spoke to said that a solicitor was instructed on the 4th july 06 regarding arrears and that it was withdrawn on the 24th august due to payment of the arrears.
she said that it wasnt the start of a repossesion as there was never a date to reposess.
i am even more confused now.

_Andy_

Sounds like they were ready to act but didn't start the proceedings. If this is the case you should be OK.

smnb08

dunstonh wrote: »

If they are the questions then the correct answers were given (assuming the arrears from 2 years ago were made up and the mortgage is no longer in arrears and hasnt been in the last 12 months).

However, as part of the underwriting of a mortgage the lender can decide to ask for more information or clarification. This tends to be on cases which are borderline or where there may be inconsistent data or they think the information given is not correct.

omg im even more worried now!

smnb08

have spoke to kensington again to ask them to send a letter to confirm reposession was never started.
they said they couldnt do that as it was started and that it was stopped due to paying the arrears off before reaching the court date!
they will send a letter to confirm this.
am i right in thinking that they are going to decline me now or will it make a difference that i managed to pay the arrears off before it went to court?
also does state that they ignore arrears over 12 months old.

dunstonh

If the new lender wanted a letter confirming that no action had ever been started and the old lender sends them one that says it was then its probable that the new lender will reject the application.

The fact you cleared the arrears helps a bit but the fact they started the court process at all works against you.

JayZed

Regarding your original question - why is the lender asking for this info? - the fact that you were three months in arrears in 2006 will be on your credit file. I'm sure that this is what prompted the lender to ask for this information.

smnb08

i thought the credit reports only held the last 12 months payment history??
mine when i recently checked online didnt show this.