Need advice re broken agreement to port mortgage

davidf_2

To set the scene;

Myself and partner had 100% mortgage on a property in Bristol, purchased for £150K approx 3 yrs ago, now worth approx £170. When we took the mortgage out, we were advised that it was portable.

Late last yr my partner was offered a fantastic new job in Bournemouth. We discussed, at length, the pro's and con's of moving, and decided it would be worth-while if there was no problem porting the mortgage across (we intended to use the equity we had built up, through doing-up the house, to pay off approx £15K of debts and get a newer more reliable car).

My partner called the mortgage company, and ran them through our intentions. The mortgage company advised that we do what we intended with no problems.

On the basis of the mortgage companies advice, my partner accepted the job, and we decided to move. I quit my job so that I could finish the renovations to the house in order to get maximum price for it. My partner began working in Bournemouth, staying down there during the week and coming back on wkends, until I had finished the house off. We then both moved in with her grandmother in New Milton, while we looked for a house/flat to buy.

Once we had found a suitable flat (£149,995) we put in an offer. We had to agree to rent the property until we sold our house in Bristol, as they were going to rent the flat to someone else otherwise. We agreed to rent the flat until completion of the sale of our house.

We received an acceptable offer on our house (cash buyers), so we rang the mortgage company to prime them, ready to port the mortgage across. It was at this stage that the problems began.

The mortgage company no longer wished to let us port the mortgage! We said, "you have already agreed to do, which is why we moved here". They say, "we'll listen back to the call". THey come back to us and say, "you're right" and "we misinformed you on that call". They refer the matter to director level, in order to get the matter resolved quickly. The answer comes back - "NO".

The person my pertner spoke to said that as far as they (Stroud and Swindon) were concerned, they were happy to honour the agreement. But the Coventry part of the business had different lending criteria, and would not budge despite the misinformation given.

As a result of all of this, we are now still renting said flat, but cannot buy. The owner still wants to sell, and will most likely kick us out once the tenancy agreement comes to an end (6months from May 11).

Our conveyancing solicitor couldn't believe what the mortagage company hade done, and advised we should pursue them for compensation. Does anyone have knowledge of such a situation? Anyone think it is worth pursuing?

N.B. We didn't have to pay any redemption fees, but I don't see how they could have reasonably imposed those fees, given they they effectively forced us to redeem the mortgage.

I think my first move will be to send them a SAR for a copy of all the conversations had over the telephone. Then a snotty, but polite, letter requesting compensation. It is difficult to quantify our loss though, due to the complicated nature of the circumstances.

Any advice would be greatly appreciated.

Sorry for the length of post, I do tend to waffle.

beecher2

Why can't you get a mortgage with another lender? You don't have to pay an ERC, so wouldn't this be the simplest solution?

InMyDreams

beecher2 wrote: »

Why can't you get a mortgage with another lender? You don't have to pay an ERC, so wouldn't this be the simplest solution?

I'm guessing because they want to get another 100% mortgage and no one else will give them one.

(Assumption made from their comments about wanting to "use the equity we had built up, through doing-up the house, to pay off approx £15K of debts and get a newer more reliable car")

davidf_2

InMyDreams - Correct. We do not have a deposit to put down on a new mortgage. All the paperwork with our mortgage said that we could continue with the existing product if we wanted to move house, so that was our intention.

kingstreet

Yet another example of a lender not explaining what portability actually is.

david - If they'd informed you properly you would have been told that you have to apply for a whole new mortgage, just like everyone else and have to have the deposit/equity and be able to satisfy the lender's criteria.

Then, you'd have the option of porting the old rate to your new mortgage.

Far too many borrowers are coming off the phone or walking out of branches thinking they have a guaranteed mortgage if they want to move house. That simply isn't the case.

The number of cases we're seeing on here suggests there's more of a problem of the issue being mis-explained, rather than simply misunderstood.

dunstonh

The mortgage company no longer wished to let us port the mortgage! We said, "you have already agreed to do, which is why we moved here". They say, "we'll listen back to the call". THey come back to us and say, "you're right" and "we misinformed you on that call". They refer the matter to director level, in order to get the matter resolved quickly. The answer comes back - "NO".

Porting has never been a contractual agreement but always subject to current lending criteria.

The issue here is not a rule breach or a breach of contract but an employee saying something wrong. Or perhaps not necessarily providing sufficient information (i.e. yes you can port but it is subject to current lending criteria rather than just saying yes you can port).

Our conveyancing solicitor couldn't believe what the mortagage company hade done, and advised we should pursue them for compensation. Does anyone have knowledge of such a situation? Anyone think it is worth pursuing?

Regardless of how hard you complain, you cannot force the lender to agree to lend you the money as you want it. Even if you went to the FOS and the FOS agreed you were told incorrectly, they cannot force the lender to lend the money.

You would expect an inconvenience payment to be made. Something around £250-£400 depending on how much you have lost out. As they have waived fees and the redemption charges, then they may actually be sufficient.

davidf_2

Kingstreet - I absolutely agree 100%. I now understand, through reading related posts on forums, that the the porting process is subject to a review of the customer's situation and the mortgage provider's lending criterion. However I feel that any mortgage provider that neglects to advise the customer of these facts is failing in their duty of care to ensure that customers make an informed decision when choosing a mortgage product. Bearing in mind this is THE biggest purchase in the average person's life, the mortgage providers should HAVE TO make sure that the customer is fully aware of these kind of proccesses, as portability is a key selling point in my opinion.

I find the most audacious thing, in my scenario, is that we moved to Bournemouth on the basis of advice given to us by the mortgage provider. We accepted their advice in good faith, up-rooted ourselves and moved, only to find out at the most crucial point in the process the mortgage provider had changed their mind! The cheek!

davidf_2

dunstonh -As a financial advisor, I woud expect you to know and understand porting, as you obviously do. Neither myself or my partner have a background in finance. How would we know that there is no contractual obligation to port the mortgage? I can't find anything in the paperwork that would confirm your assertion.

We do not wish to force the lender to lend us the money. They have shown themselves to be untrustworthy in the extreme. There is no way in hell we could trust them enough now to take out another mortgage with them.

As for the "inconvenience payment"; I do not feel that £250-£400 would be representative of the inconvenience we have incurred. The solicitor seemed to think the figure should be in the significant thousands rather than hundreds. I'll need to do a fair bit more research before deciding on a truely representative figure.

Thank you for you input though. As I said at the end of my initial post, any advice is greatly appreciated. I shall accept everything with an open mind, and I shall listen to the calls myself and review all the paperwork again before taking any action.

kingstreet

As I said, there is too much room for misunderstanding. Portability is a throw-away little option hidden at the back of most mortgage offers and terms and conditions and lenders fail to fully explain the implications of it.

I've heard other advisers describe it as "an option that allows you to take your mortgage with you when you move house so you can avoid those nasty early repayment penalties" in an effort to make the penalties more palatable.

It is clear that it should be explained as;-

- subject to status and credit worthiness at the time of changing
- subject to lender's criteria at the time of changing
- not a guarantee of a new mortgage
- a means of seeing out a special offer if you qualify for a new mortgage.

This is the portability paragraph from a KFI I prepared on Mortgage Brain two days ago;-

What happens if you move house?

If you move house you can transfer this mortgage to another property.

This product is portable, this means that if in the future you move property, you can carry the mortgage product forward to a new mortgage with the lender, for your new property. It can apply to an amount of the new mortgage no greater than the amount of the old mortgage that it applied to. If your mortgage loan is more than this amount, the lender will charge you interest on the extra amount at a rate the lender set out in the new offer. You can carry forward the original early repayment charge as well.

You must repay your existing mortgage and take out your new one on the same day. If the amount of the new mortgage is less than that of your old mortgage, you will have to pay the early repayment charge on the difference. You can only carry forward a mortgage product to and from a mortgage with the lender, but not its trading divisions.

I wondered if the lender's own website-produced KFI was any better;-

If you need to repay your mortgage to move home during the initial mortgage product (special
rate) period, provided you do not change lender (and, where the lender provides mortgages
under more than one brand, you do not change brands), you will usually be able to take the
terms of the initial mortgage product with you and they will continue for the remainder of the
initial product period. In addition, if this is during an early repayment charge period, provided
you borrow the same or a greater amount, you won't normally have to pay the charge. If the
loan is for a smaller amount, you may have to pay part of the charge.

It is clear to me (IMHO) the issue is not being made as transparent as it should.

davidf_2

I really don't think they should be allowed to use the term "portable" unless they give a full and frank interpretation of what it means in the context of the specific products, as "portable" implies, to me at least, that the same mortgage moves across the new property. On that basis, I would not assume that there would be any kind of review of the LTV ratio, as this had already been agreed.

It really does make my !!!! boil! We wouldn't have moved to Bournemouth if we knew all this last year. You would have thought that the mortgage provider would check that we understood what porting entailed, given that we advised them of our intentions and even asked them if we could do it way before me actually moved. I even turned down a really good job offer in Bristol - it makes me so angry.

roonaldo

as no one does 100% mortgages anymore, of course they are not going to let you port a £150k mortgage to a £150k property.

porting is always based on current lending criteria and should state all this in your mortgage T&C's.

I really dont understand how you feel you should be owed thousands in compensation.