Mortgage Help - Bad advice given.....legal advice???

DJB1982

Ok, well this could be a long story so i'll start at the beginning

I currently have a £94,000 outstanding mortgage on a house that was purchased by my partner and I in May 2007 with Santander for £121,500 (we paid £21,500 deposit)

In January this year, my partner and I seperated and we decided to sell the house in order to recoup any equity left in the house and move on. Unfortunatly, the house didn't look like selling and after living together even though seperated fo 4 months - we decided something had to give.

I started to look into whether i can take on the mortgage on my own and pay a sum of money (£8,500) to my ex-partner to "buy her out"

I contacted Santander in May asking how we would go about taking her name off of the mortgage and the person i spoke to told me that we would have to do a new application. He asked a few questions about my income - and any outstanding debts and i gave him my details and off he went to check affordability....he came back to me and said as it stood, they wouldn't be able to offer me a mortgage but idf i cleared an outstanding loan, and my credit card - and left myself with no debt - there would be "no problem" and everything would be "fine".

So, off i went, i cleared my debts using money my parents gave to me in order to sort my life out - i got £8,500 ready to pay my ex partner and waited a month for my credit score to update the payments on the loans/credit cards.

I contacted santander again last week to confirm that i had done what they had requested and again, affordbility was checked - and again, i was told everything was good, there would be no issues and that i now needed a solicitor in order to help the process with the land registry and deeds etc. I did that last week and then contacted santander for a third time....

This time, affordability was checked again, and i was now told that the LTV needed to be 85% and the £94,000 was too high for the house which they now have valued at £97,000. I'm told i can pay £65 to have it revalued and that it needs to be valued at £112,500 for the 85% and that if its valued at that value, the mortgage would be fine. I just needed to get passed on to the application process.

I firmly 100% believe that the house would be valued above £112,500 so i said that would be fine and the fella who was to do that application rang me today....


So - today came, he rang and we went through wages, bills, debts (none! :T) again and he based the whole thing on the house being valued at £115,000 which is still undervalued. He came back to me telling me that now i'm nowhere near being able to afford it and i either have to pay £9k or £2k and add 10 years to my mortgage.

At no point in the first two calls was i told that my LTV would be a problem.

I have spoken to the team manager who has listened back to all my calls and confirms that some of her staff used "everything WILL be fine" and other such comments that they should not have used - and that i wasn't told that the system they use to calculate afforability is not the main system and that there's is only a "basic check" She agrees that i have been given bad advice and somewhat misled.

Now - i'm in a position where i have borrowd x amount of money and handed over £8,500 to an ex partner and i'm not sure i'm going to be able to get the mortgage - all this was done based on advice given to me. Now i know i would have had to go through the application process and credit checks again - i don't disagree there.....but having been told at least twice that "there would be no problem" - im now in a position where i don't know what to do.

I feel misled, and cheated and i don't feel that santander appreciate the position their staff has put me into.

Is it worth seeking legal advice on this matter - or is there any level of staff at santander i should speak to?

I appreciate it was a long message - thanks for taking the time to read

beachie

I don't know where you stand legally, but personally i would never arrange a mortgage over the phone. I have always booked a meeting with an advisor at the bank and they have often been more understanding.

On the phone the person is simply reading from the script, but if you meet someone in person they often can often offer you something a bit better.

Just speaking from my experience anyway.

opinions4u

Is it worth seeking legal advice on this matter

Absolutely not.

Thrugelmir

DJB1982 wrote: »

I feel misled, and cheated and i don't feel that santander appreciate the position their staff has put me into.

At the precise point in time you asked a question. You were undoubtably given the correct response.

The issue is that lending criteria has been undergoing a gradual tightening process since the crash in 2008. Primarily in response to financial regulation imposed on the lenders themselves.

If the value of the property has fallen then perhaps offer your ex-partner less or defer part of the consideration.

xcapade

Im sorry but from my own professional opinion you do have a case against Santander. If I advised a client the way Santander advised you only to give you a negative outcome and financial distress, I can surely expect some form of complaint against me and my competency from you.

Under TCF "Treating Customers Fairly" I personally feel a breach of the following principles set by the FSA

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

I personally would call Santander up and voice a “formal complaint” they have 5 working days to confirm your complaint in writing and you must put all the information on this thread on a letter to them.

Please also ensure whenever receiving any form of mortgage advice you get proof of the advice given to you. I.e. a Key facts illustration at the least and a copy of the form your information was inserted into to result in the advice given. That way the FSA can see a clearer picture.

xcapade

DJB1982 wrote: »

I have spoken to the team manager who has listened back to all my calls and confirms that some of her staff used "everything WILL be fine" and other such comments that they should not have used - and that i wasn't told that the system they use to calculate afforability is not the main system and that there's is only a "basic check" She agrees that i have been given bad advice and somewhat misled.

Now - i'm in a position where i have borrowd x amount of money and handed over £8,500 to an ex partner and i'm not sure i'm going to be able to get the mortgage - all this was done based on advice given to me. Now i know i would have had to go through the application process and credit checks again - i don't disagree there.....but having been told at least twice that "there would be no problem" - im now in a position where i don't know what to do.

I feel misled, and cheated and i don't feel that santander appreciate the position their staff has put me into.

This is what causes concern in my personal opinion. "You were not told about a basic system....." thats not "transparent" at all and at the very least an IDD (Initial Disclosure Document) should have been provided to you covering the level of service Santander will be giving you.

You were advised on various occasions by Santander which means they have an obligation to send you two very important documents which fall under the "regulated mortgages" market
1) Initial Disclosure Document
2) Key Facts Illustration