Banks 'using excuses' to refuse mortgages

poppy10_2

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=462540

Homeowners are being refused mortgages for 'the most spurious of reasons' amid claims that lenders are seizing on any excuse to reject applications.

One application was rejected because the customer had exceeded their overdraft limit by just £30. Another would-be buyer was turned down because of an unpaid parking ticket. He had been issued with a county court judgment against him – leaving a black mark on his credit history.

There have been similar cases involving people pursued for repayment of disputed mobile phone bills who suddenly find lenders do not want their business.
Those coming to the end of existing mortgage deals have been shocked to find their profile has been tarnished over minor matters, meaning they will not pass credit searches used by the banks to check a customer's credit-worthiness.

Melanie Bien of the mortgage broker Savills Private Finance said: 'Lenders are scrutinising credit files more closely than ever and rejecting applications for mortgages for what seem to be the most spurious of reasons. It is as if they don't want to lend so are looking for any excuse to say No – however trivial it seems.'

chucky

this happened to me in the Summer - they kept on raising the lending critieria. Even had to use the lenders solicitors who were raising issues about everything - one of the most amusing queries was my signature on a form that apparently didn't match others.

I could only guess so as not to lend the funds or I was maybe someone that that they could not get future profit (missed payment fees etc) from.

minimike2

They dont have to use excuses. Its their money and they decide who to lend to and who not to lend to.

WTF?_2

minimike2 wrote: »

They dont have to use excuses. Its their money and they decide who to lend to and who not to lend to.

Now that the government are pulling the strings of most of the British mortgage lending sector they probably have to at least have an inventive reason other than 'lending this amount of money to that person to buy an overpriced asset in a falling market and time of job losses is financially suicidal for us'.

At the end of the day they'll be printing money to lend so anything will go.

minimike2

"We dont want to lend it"

There, thats a good enough reason.

olly300

minimike2 wrote: »

They dont have to use excuses. Its their money and they decide who to lend to and who not to lend to.

Fortunately it doesn't work like that.

If you look on the mortgages board you will find stories of mortgage offers being pulled just before exchange with the banks refusing to give a reason.

If they didn't want to lend the money in the first place then they should have checked the applicant(s) out before it got to this stage.

minimike2

olly300 wrote: »

Fortunately it doesn't work like that.

If you look on the mortgages board you will find stories of mortgage offers being pulled just before exchange with the banks refusing to give a reason.

If they didn't want to lend the money in the first place then they should have checked the applicant(s) out before it got to this stage.

Fortunately, it very much indeed does work like that.

It has always been the case that a mortgage offer can be withdrawn at any time before completion. Its nothing new. Plus most of these cases are because of things that have come to light post application, like mortgage fraud.

Stupid lending got us into this mess, I find it astounding that people think it should be allowed to continue. Banks are under no obligation to lend THEIR money if they dont want to. Lets face it, they have little money to lend at the moment, so why should they worsen the problem by further putting themselves at risk?

Yoshua

minimike2 wrote: »

They dont have to use excuses. Its their money and they decide who to lend to and who not to lend to.

absolutely right, but a better way to put it may be if they are not going to make big money from you then they dont want to lend you the money.

Its all very well droping the base rate but banks wont lend money unless they make a profit and they have very big overheads to pay for first (huge bonuses) at the end of the day they are just out to make money.

napoleon

Why do they need excuses at all? All the banks have to say is that the property you want us to lend you money for isn't worth what you'd like pay for it. And on that basis only a madman would lend money.

Generali

!!!!!!? wrote: »

Now that the government are pulling the strings of most of the British mortgage lending sector they probably have to at least have an inventive reason other than 'lending this amount of money to that person to buy an overpriced asset in a falling market and time of job losses is financially suicidal for us'.

At the end of the day they'll be printing money to lend so anything will go.

It's the problem that when Governments get involved with what should be private businesses it gets very messy and political.

In the past if you couldn't get a loan then the rant is about how terrible the banks are. The banks still won't lend to you because they don't think you'll be profitable (hence the initial decision).

Now the whinge is, 'I've paid all this tax money to the banks and they still won't lend to me so the Government must do something.' If the Government doesn't sort it out, they've lost another voter perhaps. So the Government leans on the banks to reduce lending criteria and then has to print or borrow or tax more cash to pay for it and so everything becomes a little more of a mess.

If the UK economy can't pull out of the current nosedive soon I really fear for the future. Her Government can't just keep paying out your kids' and grandkids' cash forever. They'll need it to educate their kids and keep them safe.

drbeat

minimike2 wrote: »

Stupid lending got us into this mess, I find it astounding that people think it should be allowed to continue. Banks are under no obligation to lend THEIR money if they dont want to. Lets face it, they have little money to lend at the moment, so why should they worsen the problem by further putting themselves at risk?

You hit the nail right on the head!