Loss of Deposit - HELP

ChatMangeTout

Hello Everyone
I would like some advice on my situation that occurred last year.

I was in the process of buying one bedroom flat in London last August. I went with a broker who found me a mortgage with a popular high street bank and the mortgage offer was valid for 6 months.

I passed the credit check and the conveyancing was arranged by solicitors recommended by my broker.

Towards the end of September, exchange took place and the deposit was transferred to the seller's account.

Completion was supposed to happen in a week.

Four days later, the offer of a mortgage was withdrawn:mad:

The reason for the withdrawal, as given by the mortgagebank, was 'I had failed the credit check' the second time round as they had to redo it as more than three months had passed since the first one had been done.

One of the reasons i could have had a lower credit rating during that time was I had internet fraud on my account.
My own bank wrote to the mortgagebank to confirm I was a victim of fraud but the mortgagebank just acknowledged it.

So in summary, my deposit was paid to the seller, then my mortgage withdrawn and then I could not complete. I have now lost my deposit.

I am seeking free legal help so far and considering going to the financial ombudsman.

Can anyone advise how I might be able to recover my deposit and if am i going through the right and all avenues?

Thanks for any comments/help:)

PS
1. When the mortgage was withdrawn, I tried to get another mortgage but the credit crunch made it impossible.
2. I tried to contact the seller just after the completion date to get a grace period but the seller notified me that he was increasing the sale price of the flat by the amount of the deposit :mad:

Trollfever

What advice has the solicitor who advised you to sign the contract given to you?

Annisele

If this all happened 12 months ago, what has happened since then? Did you fail to complete and then do nothing for 12 months, or have you/the vendor done something in the meantime? What?

ChatMangeTout

Hi Trollfever: The solicitor was not helpful. He stated that those were the facts and apologised but explained that because of the low credit rating, the bank was allowed to withdraw. That was pretty much it as far as he was concerned.


Hi Annisele,
I did fail to complete and I have lost my deposit. I did try to obtain the deposit back from the vendor by writing and explaining the situation to him and asking him for more time. His response, thru the estate agent, was to increase the price of the property !

I have also been to the CAB and various solicitors during thse past months seeking legal advice about how to get my money back.
In the Legal Aid centre, the 1st solicitor who was helping left after 6 months. Then the next solicitor wrote to the mortgage bank which in turn took 3 months to reply. Now we are close to contacting the Ombudsman.
The vendor has currently put the flat back on the market as well.

Trollfever

If your solicitor did not warn you about the consequences of failure to complete, then try here:

We are a new organisation that will have formal powers to resolve complaints about lawyers. It will be a free service. Our job will be to look at legal complaints in a fair and independent way – we will not take sides.
If you have a problem with the service provided by your lawyer, you should first complain directly to them. But if you are still not satisfied then we may be able to help.
Our service will be open to all members of the public, very small businesses, charities, clubs and trusts.
We open on Wednesday 6 October 2010.

http://www.legalombudsman.org.uk/

haras_nosirrah

I don't think there is any complaint you can make with the solicitor here - it is not the same as with a new build off plan where you have exchanged contracts without a valid mortgage offer.

I had this with the Woolwich on Monday - tried to pull a mortgage offer after exchange for my client as they hadn't noticed it was downvalued (and they don't send the brokers the valuation so I didn't know)

I managed to get them to honour the offer - did your broker try to get this overturned for you at all?

I am not sure what you can do - have you followed the complaints procedure through the bank?

ChatMangeTout

Hello Haras

My broker "apparently" tried to overturn the withdrawal but with no luck. He also went to the market to find a new mortgage with also no luck.

I am currently complaining to the mortgage bank. Last week, Legal Aid has written to them saying that their reasons are not strong enough to have had the mortgage offer withdrawn.
The reasons they gave were :-
1. My passport does not have my middle name which is on my birth certificate (which should have been picked up by the 1st credit rating anyway & I have stopped using my middle name for about 10 yrs coz I don't like it)
2. My current address is not the same address as the one on the mortgage application (which is not true)
3. Credit rating was low because of fraud (However I was the victim, not the fraudster)

haras_nosirrah

can I just ask which bank you have been dealing with?

It took me 5 hours of arguing with Woolwich to get it overturned - they were willing to offer my client 5k less owing to the downvaluation (which they hadn't noticed when issuing the original mortgage offer) and it took the MD of my brokerage firm talking to someone high up in Woolwich to sort it. It wasn't easy by any means. The main argument we had though was it was their mistake which they admitted.

I am surprised if your offer was valid for 6 months they did renewed credit checks after exchange. If your passport was the same as used with the application and the address was the same it must be whatever fraud was committed - what was the nature of the fraud?

When did you exchange and when were you supposed to have completed?

I don't think you will get anywhere with the vendor. It isn't their problem. It is between you and the bank. They do have the right to withdraw the offer up until completion but I have been doing this for 4 years and that was the only time it has happened to one of my clients so I believe it to be very very rare.

Best of luck with the ombudsman.

ChatMangeTout

Hi Haran

According to my broker, he did his best to convince the bank to change their decision regarding the withdrawal.
The mortgagebank asked for a couple of evidence :-

1. evidence of internet fraud which was provided by my bank.
2. another credit check (this was performed after withdrawal of mortgage).

My broker relayed this to me and I duly provided the required information but it made no diference in the end as the mortgagebank did not change their mind.
Regarding the fraud, I was the victim where my money (and its overdraft facilty amount) in my account was taken out over the internet.
Unluckily for me, this was the time when the mortgagebank were doing the second credit check and this left me with a low credit rating.
I exchanged on a wednesday and was supposed to have completed by the following week but this never happened.
Instead a few days later, the bank withdrew their offer.:(