Bottom of chain has mortgage pulled AFTER exchange

GDB2222

Well, if I were in the position of the 79 year old lady, I would get a bridging loan (or use my savings) and complete my purchase from the OP.

I would still have the 10% deposit from the FTB, so I would offer a 5% discount on the house I was selling and hopefully get a quick sale, and have an extra 5% at the end of it. It might not work out like that, but hopefully I wouldn't be out of pocket.

Alternatively, possibly one of the other people in the chain might be interested in an immediate purchase at a 10% discount?

Of course, I'm not 79, and it must be pretty awful for her to be in that position at her age. I hope there's a bit of give-and-take, and everybody gets it sorted out without going to law.

littlemissfrugal

our buyers had their mortgage pulled on the day of exchange following a last minute credit check - we were due to exchange on the Thursday and complete Friday we have been waiting nearly 4 weeks for them the secure another mortgage and it has been the most stressfull time ever - they apparently have approval and are just waiting for the offer in writing but everyday is just agony - I cannot imagine how we would feel if we had actually exchanged and litigation was needed my best wishes to you both

Swipe

Well seems this is becoming a more common problem, I'm selling a house. I was due to complete last week but the buyer's lender is refusing to release the funds. We exchanged 2 months ago so it seems likely that the lender has pulled the plug. Notice to complete has been served by my solicitor.

vexta

Thanks all for your thoughts and ideas, head's starting to spin from it all. The idea of it all degenerating into litigation is a nightmare as we've all had such a good rapport up till now.
The past week has been full of chatter and text messages between all parties, first in excitement and anticipation of impending moves and then of our worries and panic as it started to unravel and then a surreal day of quiet today as we all wait to see if FTB can get a new mortgage.

Just had a text message from our neighbour who is the daughter of our buyer saying that her buyer (the FTB) had texted saying that she's still hopefull to persuade original lender as new evidence has come to light about them being aware of her earlier bankcruptcy, don't know if this is a stalling ploy or not but she has said that she is still trying other avenues as back up, ie: brokers specialising in hard to get mortgages etc.

I so hope that we don't have get to serving notices to complete.

dippydog_2

I'm absolutely astounded by these threads about things falling apart after exchange.
I thought the whole point of exchanging was that everything by then was in place and that no solicitor would exchange until they were satisfied the transaction was viable?

Soot2006

dippydog wrote: »

I'm absolutely astounded by these threads about things falling apart after exchange.
I thought the whole point of exchanging was that everything by then was in place and that no solicitor would exchange until they were satisfied the transaction was viable?

Me too! :eek:
Am selfishly glad these threads were not appearing all last week as we completed on Friday ... I'm feeling retrospectively nervous now after having felt relatively calm since the exchange!

barnaby-bear

andys15 wrote: »

That is surely the lenders fault though for not checking all was in order. Regardless of whether or not they had the paperwork to say she had been a bankrupt, it shouldn't matter. If contracts were exchanged with a mortgage agreed, then the lenders will be the ones in breach of contract.

Even if this was the case - new information can appear - e.g. a new CCJ be awarded, notification of redundancy between exchange and completion.... lenders always have reserved the right to pull offers until completion - hence why some people like exchange+completion on the same day.... so this can't happen.

A solicitor doesn't have to check an offer in place - think of all those who exchanged on off-plan 2 years ago - the solicitor just has to warn of the legal consequences if you don't find an offer/complete.....

vexta

barnaby-bear wrote: »

Even if this was the case - new information can appear - e.g. a new CCJ be awarded, notification of redundancy between exchange and completion.... lenders always have reserved the right to pull offers until completion - hence why some people like exchange+completion on the same day.... so this can't happen.

A solicitor doesn't have to check an offer in place - think of all those who exchanged on off-plan 2 years ago - the solicitor just has to warn of the legal consequences if you don't find an offer/complete.....

Hi barnaby-bear,
The thing about this one is that the FTB had a bankruptcy about 5 years ago which I think may have been already been discharged and it just rests on the fact that the lender reckons she didn't make this clear during her application. She reckons she did and that she has fresh evidence to back this up and will use this a a bargaining tool because surely the lender shouldn't have let this go to exchange if they did have this info and weren't happy with it?

JayZed

zzzLazyDaisy wrote: »

You might have a complaint to the financial ombudsman though, if it can be shown that the bankruptcy details were disclosed to the lender before the mortgage offer was made, and the FTB relied on that offer to exchange (obviously) and then the lender withdrew the offer on the basis that although they were given the bankruptcy information, they overlooked it, and now want to change their mind.

The FTB might have grounds for a complaint to the ombudsman, but nobody else in the chain would (since nobody else has a relationship with the lender). And even if the FTB were to get a favourable judgement from the ombudsman eight or nine months down the line, fat lot of good that's going to do anyone now, when it matters.

JayZed

vexta wrote: »

Hi barnaby-bear,
The thing about this one is that the FTB had a bankruptcy about 5 years ago which I think may have been already been discharged and it just rests on the fact that the lender reckons she didn't make this clear during her application. She reckons she did and that she has fresh evidence to back this up and will use this a a bargaining tool because surely the lender shouldn't have let this go to exchange if they did have this info and weren't happy with it?

I really hope for your sake (and for everyone else's) that she succeeds in persuading the lender to change their mind, but I'm afraid I wouldn't count on it. I'm pretty sure that even if it was the lender's fault that her bankruptcy was overlooked, the lender is under no obligation to advance the loan. The decision has been made on the basis of the lender's underwriting criteria, which she fails. No harm in trying to get the lender to change their mind, but she really has to look at alternative options (i.e. other lenders) as well.