Has my sister been badly advised by Barclays and her solicitor?

Senior_Paper_Monitor

One small point - was she 'advised' or 'sold' ? The KFI/offer will make that clear.

Monkey_Joe

Senior_Paper_Monitor wrote: »

One small point - was she 'advised' or 'sold' ? The KFI/offer will make that clear.

Not sure what you mean, but I guess she was advised about various mortgages by the advisor and then sold one she was liked. If that is what you mean :S

She just went into the branch, booked an appointment with advisor, advisor offered mortgages, she picked one, she applied, credit search done, went to underwriters, they did their search and then offer came through post. That was it...

She only knew about the condition, after she recieved the offer. It was never discussed or mentioned during the entire process.

As I said earlier....

Im not a finacial expert nor do I know anthing about the mortagages, but surely is it not a bit stupid for a lender to lend someone money on the condition that they will pay off £22k of debt within 30 days AFTER completion! Would it not be just easier and hassle free to make the person pay off the debt first BEFORE completion? It was not as if my sister and husband promised them at the start they will pay of all debts if they get a mortgage, no one even mentioned it and the debts where obviously taken into consideration when the underwriters where making their decision whether to lend or not to my sister. Therefore, if debts like my sister have is such an issue to them why lend to her in the first place, why not make her pay debts of first and then lend, why go through with the completion and then demand 30 or so days later for the money back when they discover that the debts have not been paid!? Its sound a pretty dumb tactic or am I misunderstanding something here?!

VIGILANT22

Sold....mean you "picked one"..therefore rcvd no advice...

Advised as it says........

picardygirl

Monkey_Joe wrote: »

Yes the guy who sold us the mortgage does work for Barclays.

Who actually got the mortgage you or your sister?

Monkey_Joe

If I was a lender and someone with 22k worth of debts and a combined salary of £60k came to me for a £50k shared ownership mortagage, I would either:

A. Not lend to them
or
B. Only lend to them on the condition that they pay of all their debts before completion otherwise they will not get the money.

To me it just seems pretty stupid, to make an offer, lend the money and then kick up a fuss demanding money back after discovering that they have not paid off £22k debts within 30 days of completion. If the debt was such an issue, I would not lend to them or at least make them pay it off before completion.

Does that not make sense?

dunstonh

I dont believe the Barclays rep was a just a "low skilled clerk". His job title was Finacial Advisor and his buisness card had various qualifications such as ""MBA".

So, in other words he as was a Barclays sales rep. The banks are the training ground for new advisers, failed advisers and those that cant make the grade as independents.

He could be very good and looking to progress or he could be that he is on a management trainee programme and has to do the advice job for 6-12 months as part of his training (not uncommon).

However, one fact doesnt change. He is a sales rep with targets and pressures and is not financially responsible for the advice he gives (unlike proper independent advisers). To put that in context, IFAs do the majority of regulated transactions but have under 2% of complaints at the FOS. The banks do about 20% of the transactions but have over 50% of the complaints. Barclays have consistently made the financial press headlines over the last few years for basic errors in advice.

The bottom line is that a sales rep sold a mortgage and told a porkie that could get him into trouble in the event of a complaint. Although he would no doubt deny it.

However, thats going off on a tangent. Your sister has the issues and if she does pursue it then Barclays can just ask for the money back on the basis that she knowingly entered into mortgage fraud. Yes, she can say the solicitor and sales rep told her she was ok but you have said that she recorded the conversations which indicates she knew she was doing wrong and they did tell her that they don't check. So, she was complicit in any fraud.

Monkey_Joe

picardygirl wrote: »

Who actually got the mortgage you or your sister?

sorry typo.

Monkey_Joe

dunstonh wrote: »

So, in other words he as was a Barclays sales rep. The banks are the training ground for new advisers, failed advisers and those that cant make the grade as independents.

He could be very good and looking to progress or he could be that he is on a management trainee programme and has to do the advice job for 6-12 months as part of his training (not uncommon).

However, one fact doesnt change. He is a sales rep with targets and pressures and is not financially responsible for the advice he gives (unlike proper independent advisers). To put that in context, IFAs do the majority of regulated transactions but have under 2% of complaints at the FOS. The banks do about 20% of the transactions but have over 50% of the complaints. Barclays have consistently made the financial press headlines over the last few years for basic errors in advice.

The bottom line is that a sales rep sold a mortgage and told a porkie that could get him into trouble in the event of a complaint. Although he would no doubt deny it.

However, thats going off on a tangent. Your sister has the issues and if she does pursue it then Barclays can just ask for the money back on the basis that she knowingly entered into mortgage fraud. Yes, she can say the solicitor and sales rep told her she was ok but you have said that she recorded the conversations which indicates she knew she was doing wrong and they did tell her that they don't check. So, she was complicit in any fraud.

Yes I agree with you.

I'm just confused at Barclays tactic. What would you do if you was a lender and my sister came to you for a mortgage. I assume you would either:

A. Not lend to her
or
B. Demand that she pay of all her debts before completion otherwise no mortgage!!

What Barclays did does not make sense to me; they made an offer to my sister after obviously taking her debts into consideration and then expecting her to pay of the debts within 30 days AFTER completion is a bit stupid in my books!! Surely, if the debt was such an issue why offer and complete in the first place? Would it not be easier to sort these issues out with the customer before completion?

My sister has moved in now. Say, for example, she pays her mortagage without fail regulary for 1 year and has been paying of her debt as much as she could. She is in a secure job and there is no indication her or her husbands finances will change for the worse. Then all of a sudden Barclays, 1 yr after completion, contact her and ask her if she has paid of all her debt within 30 days of completion. When they discover she has not, I assume they would kick up a fuss, cry "fraud", take my sister to court and demand their money back right? Why go through all this bother, when it would be much simpler to just ensure that she paid of the debts before completion or just not lend to her at all? No one has answered this question.

dunstonh

I'm just confused at Barclays tactic. What would you do if you was a lender and my sister came to you for a mortgage. I assume you would either:

A. Not lend to her
or
B. Demand that she pay of all her debts before completion otherwise no mortgage!!

You are mixing up the conflicts that occur in banks daily. The lending team only want to lend to good cases. The sales team want to get paid their bonuses. If they dont sell, they dont get paid.

What Barclays did does not make sense to me; they made an offer to my sister after obviously taking her debts into consideration and then expecting her to pay of the debts within 30 days AFTER completion!!

This suggests that the sales rep told the underwriters that the debts were going to be cleared within a period. Sometimes the mortgage application has a box to indicate debts that are being cleared with the application. So, the underwriters have possibly lent the money on a misconception.

Surely, if the debt was such an issue why offer and complete in the first place? Would it not be easier to sort these issues out with the customer before completion?

Because the lending team think everything is fine because the sales team have fudged it through by telling porkies?

Then all of a sudden Barclays contact her and ask her if she has paid of all her debt within 30 days of completion. When they discover she has not, I assume they would kick up a fuss, cry "fraud", take my sister to court and demand their money back right? Why go through all this bother, when it would be much simpler to just ensure that she paid of the debts before completion or just not lend to her at all? No one has answered this question.

The lender isnt going to check after 12 months. The checks that are made on a sample of cases is usually in the first 2 months. Indeed, in some cases, the solicitor is instructed to get the evidence and ensure the debts are cleared at the point of distribution of the funds.

betmunch

Dunston, has hit the nail on the head about explaining why these things happen, I couldnt quite get my head round it as it was all Barclays. Of course, the Sales Team and the Underwriters are going to be clashing constantly.

If the lenders ask that debts are repaid after completion that just the way they do things, I used to use a lender that would actually insist on the solicitors paying the debts for the client (was for debt consolidation remortgage rather than purchase) but thats just because they cared that it was actually done or not.

In taking this stance Barlays clearly do not care if the debts are paid off or not as long as they get their money (which you have said shouldnt be a problem for your sister) however if they should find out the debt wasnt repaid through random checking,or accident, or whatever then they will have to take action which could range from anything from asking for the loan back, which may not be posible to sending your sister a letter telling her shes been very naughty and should have paid the debt.

I think you will just have to wait and see what happens now. But whatever you do, DONT try and understand how the banks work, it'll make your head explode!

Cheers