the 6 month guideline

wolfehouse

mortgage and house purchase were agreed
but bank now saying they won't lend as house is
owned by building company that took it in part exchange and they havebn't owned it for a full 6 months.

anyone had any joy getting an 'exception' because the owner is a big builder? or had other experiences with the '6 month rule'?

Floyd65

Morning

We were in exactly the same situation earlier this year, this is an extract from an email I sent to my MA:

Further to our conversations earlier. I have found this on Google. According to the Council of Mortgage Lenders Handbook, which was updated in December 2010, a mortgage lender does not have to follow the 6 month rule in the following circumstances (this is taken from a discussion board on Property Tribes)

To answer your title first - it is a rule in as much as the solicitor must declare the fact a seller has owned the property less than six months to the lender IF the lender is in the CML and IF they follow the CML guidelines (which they are supposed to do).

Actual CML handbook wording:-

5. Title

5.1 Surrounding Circumstances

5.1.1 Please report to us (see part 2) if the owner or registered proprietor has been registered for less than six months or the person selling to the borrower is not the owner or registered proprietor unless the seller is:

5.1.1.1 a personal representative of the registered proprietor; or

5.1.1.2 an institutional mortgagee exercising its power of sale; or

5.1.1.3 a receiver, trustee-in-bankruptcy or liquidator; or

5.1.1.4 developer or builder selling a property acquired under a part-exchange scheme.

5.1.2 If any matter comes to your attention which you should reasonably expect us to consider important in deciding whether or not to lend to the borrower (such as whether the borrower has given misleading information to us or the information which you might reasonably expect to have been given to us is no longer true) and you are unable to disclose that information to us because of a conflict of interest, you must cease to act for us and return our instructions stating that you consider a conflict of interest has arisen.

The see part 2 bit relates to the individual lender lists and simply states to which department or individual the solicitor must the information report to.


I would assume that the Halifax is part of the CML, so surely this means that because of 5.1.1.4, then there is no problem with the mortgage been granted to us?

Your thoughts would be appreciated


The following day, everything was given the okay and purchase went through no problem

kingstreet

This has been in the Halifax criteria as long as I can remember;-

The following cases are exceptions where it is acceptable for the property to be sold on within six months of acquisition by the seller.

Where sales are by:

a personal representative of the registered proprietor; or
an institutional mortgagee exercising its power of sale; or
a receiver, trustee-in-bankruptcy or liquidator; or
a developer or builder selling a property acquired under a part-exchange scheme.

and I'd be surprised if others didn't have the same exception. Which lender is it wolfehouse?

kingstreet

Abbey's is less clear cut, but I'd still expect acceptance after confirmation;-

If the property has been owned by the vendor for less than six months, the application may be referred for investigation. This could result in delays to completion or in some instances the application being declined.

wolfehouse

it's halifax
i'll be trying to speak to someone more senior today.

wolfehouse

bank are saying they recently changed their policy and now lawyer and policy department will have to talk
lawyer is on holiday
selling company say they won't wait and are putting house back on the market (although any other buyer will have same problem)
bank are also saying that lawyer put in some clause about being able to pull out (can't remember the terms)
which he said was to protect us but bank are saying that means he must have known.

I feel lawyer has done a very poor job, bank hasn't helped.
now i am gutted.