HELP HELP HELP With Halifax Mortgage application

dpoa

Hi all,
This is my first posting on a forum but I am desperate for help. We applied for a mortgage from the Halifax via our mortgage adviser and I advised that I had been previously bankrupt and discharged in February 2009. We had a mortgage offer and exchanged contracts 2 weeks ago. We were due to complete last Friday and the Halifax have now said that they do not approve mortgages to people who have been previously bankrupt. We have already paid £17500 for our deposit for the house which we are buying (repossession) and the contract says that we will lose the deposit plus incur interest charges if we don't complete. Can the Halifax do this???? I am 5 months pregnant and have people moving into my house shortly which means we will have no house, be £17500 pounds down and no where to live. Our solicitors are working on it and we keep being told by our mortgage advisor that "everyone is doing what they can" and we don't have an answer. Our deadline is TOMORROW before our money is lost - is there anything I can do?
Thanks

Brock_and_Roll

There is not much you can do at the moment - best left to the solicitors.

However, in the circumstances it is highly unlikely that you will lose your deposit and it would take a very cold hearted vendor to instruct their solicitor to fight to keep it.

I presume you were up front about the bankruptcy in your mortgage application and that you actually sway the offer from the Halifax. If that is the case it is pretty poor stuff from them but I am sure they have contractual wiggle room.

Nationalist

This is very cheeky considering that Halifax (HBOS) were bankrupt themselves and had to be rescued by Lloyds.

Tell your solicitors to lean very hard on Halifax, making sure they know they are about to make a pregnant woman homeless, and that you consider a binding offer of a mortgage to have been made and they will be liable for all costs unless they deliver the mortgage as promised.

silvercar

So your mortgage advisor applied to the Halifax knowing that you had been bankrupt and that Halifax won't accept bankrupts??????? I think he has some explaining to do!

ruggedtoast

God, this is everyone's nightmare.

Firstly, try and keep calm. If you google "mortgage offer withdrawn after exchange of contracts" and suchlike, you will find other cases like this, and it seems that in the majority of cases things are worked out.

Secondly. Cross post this on the Mortgages and Endowments board. There are a lot of mortgage brokers over there who will be able to offer advice. There was a similar case to yours a month or so ago on that board with Barclays. They had applied in branch and been repeatedly assured that the bank were happy to lend to an ex bankrupt only for things to fall over when the solicitor did the bankruptcy search. They did lend in the end.

Thirdly. Call Halifax yourself. Call them and call them and call them again. If someone is going to call you back tell them you will hold even if you are on hold for an hour. Dont just leave this to your mortgage broker to do, its highly possible that he/she is mostly concerned about covering their own backside right now.

Fourthly, start researching other lenders who might lend to you.

What has your solicitor said about the deposit liability?

Richard_Webster

The moral here is to get the lender to commit themselves in writing about issues like this.

Having the mortgage advisor say things at an interview is one thing, having something in writing from Halifax saying that they are prepared to lend to discharge bankrupts that you can produce to them later is another.

ruggedtoast

Thats probably not very helpful to her right now though is it.

I dont really understand why solicitors dont recheck this information themselves as they know full well that they are going to be doing a bankruptcy search post exchange.

TMSL

Halifax deifinitely do lend to discharged bankrupts, I have completed two mortgages this year where this is the case, I would double check with your adviser , it may be because you were only discharged in 2009 thats causing the problem.

Richard_Webster

Thats probably not very helpful to her right now though is it.

I dont really understand why solicitors dont recheck this information themselves as they know full well that they are going to be doing a bankruptcy search post exchange.

If clients tell me that there is anything unusual about their circumstances etc or e.g. they are buying at an undervalue from a family member and so want the lender to consider basing its LTV on market value rather than price I always tell the client to make 200% sure that the lender does know about the factor.

I don't really know why we have to do bankruptcy searches because you would expect it was a pretty basic thing the lender would check as part of its initial checks.

Because of the hassle involved at the last minute before completion in establishing whether a bankrupt J. Smith is your client John Smith I generally have them done at an early stage as well so we have time to do any necessary checks if the entries could relate to our client. It does mean that the client has to pay an extra £2 per name though. If we then establish that it is our client we would write to the lender before exchange asking if this information affected its lending decision.

However I do this more to avoid the hassle of establishing that the bankrupt person with a similar name is not my client - i don't think this is general practice in the profession.

Trollfever

Was the bankruptcy disclosed in the mortgage application?

Richard_Webster

Was the bankruptcy disclosed in the mortgage application?

This is the issue - if the fact of the bankruptcy was down in black and white on the application form then OP has Halifax with no defence if they complain to the Financial Services Ombudsman.

I guess the difficulty is proving that. As I have said, if I know about this kind of thing I advise my clients to make 200% sure it is all written down. Problem is that they tell the advisor who makes a phone call and seems to explain the position and someone on the other end perhaps gets the wrong end of the stick and says its OK and perhaps the advisor doesn't bother to put anything in writing. So where's the paper trail?