Nationwide withdrew mortgage offer just before completion

silverm

Hi,

I have exchange contracts under HomeBuyDirect shared equity scheme and Nationwide provided me a mortgage offer in Nov 2010. The property is due for completion and once my my solicitor asked to release funds, Nationwide withdrew the offer.

I contacted Nationwide today and they provided the only reason being the type of property I was purchasing, nothing to do with me! The whole mortgage approval process took 9 weeks with them, loads of checks, documentation, conveyance etc. 7 weeks after completion, Nationwide decided they don't provide mortgage on the type of property I was purchasing.

The person in the call centre even said to me had they known the property, they would have declined immediately. It is tragic as the property is the same from day 1 of my application to date.

Completion is due next week and I am so scared! For every day I delay the mortgage completion, the developer will charge penalty fee.

Can anyone advise on what to do next?

Thanks in advance.

Regards.

DVardysShadow

Take advice from your solicitor - and get whatever evidence you can of the reason for refusal. It is a very poor showand I am sorry to say that you have a big problem to manage now. You need to understand exactly why the offer has been withdrawn. Did Nationwide misunderstand or did you, your solicitor, the developer, your mortgage advisor or anyone misdescribe the purchase?

silverm

All Nationwide said over and over was the type of property. And all they could do was to 'apologise' for their mistake...

Unfortunately, my solicitor is only asking me to apply for a new mortgage and not doing anything re them...

azkaban420

Crikey, what a horrible position to be in. Just a thought, I presume NW did a valuation of some sort (even if a new build) they would be putting some value on the existing or potential property before making you a firm mortgage offer?

If so, I would take it that it is their mistake that they have offered you a mortgage then realised they now can't for whatever reason? I'm not aware of how HBschemes work so my apologies if this is not the case.

You really need to push this with your solicitor as they should be in the know-how of how to overcome this problem. Yes, going for a mortgage with someone else may be possible but they may refuse on the basis that you've recently been refused by another provider. Even if they don't, it could take weeks before they are in a position to offer funds for completion.

I really hope this works out for you, absolute nightmare.

Az

sarahevie

Bizarre this happened to us in Nov 2007 with Nationwide (haven't found anyone had this problem til now) but wanted to re assure it worked out for us.

We were in a chain buying a re sale house, straight forward purchase. 7 days before completion got a phone call from sequence (our brokers arranged via william h brown EAs) saying Nationwide had withdrawn offer.

Apparently lending was tightening and they didn't have funds to lend. In tears went with my mum to Halifax (my bank who myself and OH have banked with for years.)

Mortgage broker went through our application, checked our accounts salary multiple /deposit meant it didn't need underwriting funds with solicitor within 4 days. Halifax are quick.

The product wasn't as good though 5.99 fixed for ten years no tie ins after 5. Fully portable. Nationwide was 5.59 fixed for 5 years.

My advice get ringing round some lenders see if they can do anything.

silverm

Many thanks Sarah, good to hear you were able to get another one. Will try Halifax, it came up as an option today. Fingers crossed.

Doozergirl

I wouldn't take the word of someone in a call centre on why this has gone wrong. I'd expect to speak to an underwriter, frankly and I'd want to know exactly, in minute detail, where the issue arose, where the communication went wrong etc. and make sure you understand what it is that is supposed to be the problem and check it with the builders as well because mortgage companies are not infallible, they run on human power and it only takes one wrong ticked box to turn things on their head.

I would be very surprised if a developer was building a property that was of type deemed un-mortgageable by one of the biggest lenders in the Country! You wouldn't last long in business...

silverm

Call centre person created a case for the underwriter and they need to come back to me in 24 hrs. Hoping to learn more after that.

The developer is one of the biggest in the UK, so it is very very surprising...

Richard_Webster

If it was a shared equity case then I would have expected the mortgage offer to have clearly stated this. This makes me think that the mortgage offer was produced as a standard one because there was an internal breakdown in communication - the messages about the kind of case it was didn't get through to where it mattered.

What bothers me is that if the solicitor saw a standard mortgage offer and he knew it was a shared equity case he shouldn't have let OP exchange contracts until he had written a "You know it is a shared equity case, don't you" letter to Nationwide and received a reply confirming they did and they were still happy to proceed. Sounds as if he only told them when he sent the certificate of title. If this is the case then solicitor is to blame and he will have to sort it out - perhaps providing short term bridging funds from his own resources?

Solicitors have a duty to disclose to lenders if there are other loans being used to buy the property so if the offer doesn't mention that Nationwide knows it is a Homebuy Direct Case then the solicitor should have told them and asked for consent to proceed. If it does mention it then they shouldn't be withdrawing the offer and I would be threatening them with the newspapers etc if they withdrew the offer because of their own internal foul up. Insist on talking to the person in charge and get everything in writing.

Jackinbox99

I think the lenders in general are tightning on lending. I had a similar problem a couple of months back. Mortgage agreed, no problems, double checked all details with the bank a few days later, no problem, tripple checked all details with the bank a few weeks after that, no problem. Then litterally days before complicion they changed their minds and the reason they gave just did not make sense at all. It was as if they were trying to come up with a reason not to lend.

I went to another bank, they said "no prob at all", they processed my app within 2 days, had valuation guy out on day 4 and was all ready to go on day 5 or 6. The interest rate I got with them wasnt as good, but it was worth it for the level of service they gave me.

So, shop about!

F_T_Buyer

I would be putting massive pressure on the solicitor. Unless something has changed (house fell down, your credit status changed) they won't have any excuse not to lend.

This is why I tell people not to apply for any credit after applying for the mortgage UNTIL they move in the home. I have heard of someone (well via my broker friend) who applied for lots of credit after exchange (TV, Sofas, etc on credit) and when the lender came to release funds they rechecked their credit report and found lots of outstanding debt - so they declined the mortgage).

You should really be pushing this with the solicitor, and get everything in writing. I'd be speaking with my solicitor twice a day chasing this. Oh, and if you ring Nationwide record the phone call but you must tell them.