Mortage decline with no reason given question...

ugh1979

I just had my mortgage application declined by Halifax, and they said they can't give me a reason.

Friends are telling me they don't tell you on the phone but you have the option of sending them a letter and they’ll get back to you detailing exactly why you were declined. They have a legal obligation to do so.

Is this correct?

holly_hobby

No they don't have any obligation to tell you why they have declined your application.

In situations such as this its usually due to non-disclosure.

If you really haven't a clue why they have declined, obtain a copy of your credit report from one of the ref agencies, and see if there is anything there that you didn't know of. i.e adverse credit, incorrectly linked addresses and such like.

Hope this helps

Holly

betmunch

They can give you a reason. They wont though!

If you push it you might get an answer though, although that is likely to be a generalisation.

You could spend a lot of time and effort trying to force them to give a reason, which ultimately boils down to "We just dont want to" I would use that time and effort to check your credit file, and if its clean, go to your second choice lender.

ugh1979

My Equifax credit score says excellent, but I know that doesn't mean much as mortgage providers use their own scoring system.

I have other credit that i've paid off no problem, and a couple of low ones I still pay, and am on the electoral register and have been at my current residence for 7 years, so it's all good there.

However, I have a default 2 yeasr ago with First Direct on a loan. I'd been paying them back for years and then one day out of the blue they demended the full balance back all at once, which I couldn't do, so they passed the debt to a credit collection agency, who've i've been paying back since.

My mortgage application was accepted in principle, and when I asked about the credit check the person at Halifax said it had passed no problem and I was in their top band. However, i'm wondering if it's only when it gets to the underwriters the default is showing up?

Why would they tell me my credit rating is in their top band after the soft check?

Very frustrating.

holly_hobby

A top band pass with the halifax would be an A or B - with a default I would very much doubt this is correct.

AIP usually check on public domain info (so as not to leave a footprint) - which would disclose voters roll info, bankruptcy and CCJs (which as court orders are displayed on such a search).

Defaults are not court registered - so will not appear on a PD check - but will reveal themselves on a full credit check with CRAs.

I suspect that you did not reveal the default at application stage, which has only come to light on the full credit check - the result of which will be treated as "non-disclosure" by Halifax. (which is what I suspected when you say they refuse to give details on the basis of rejection).

I am afraid, the Halifax ship has sailed now - as they won't reconsider due to what they will see as concealled info.

Try a broker, reveal the DN - and let them do the leg work in getting you placed somewhere else. (NB - any potential new lender may want to know why you were declined by Halifax, as their search will show when the new lender does their own).

Hope this helps

Holly

ugh1979

Ok thanks, I understand now.

I did go through a broker, but then found a deal from the Halifax that was slightly better than the one he had found, so he said just apply directly. He's aware of the default but said the check he done sailed through no problem, so he didn't think it was a problem.

I would never have applied directly if he hadn't told me to and told me the credit check had sailed through.

I've been back in touch with him this afternoon and he is going to look in to it on Monday and see if anything can be done.

holly_hobby

What I would do is have either a full application assessed

A full app as oppossed to an AIP because of the DN info you have. You sound as though you have now found a property to pch, so submit the app with instructions not to go to survey, until you have the ok on you personally.

OR

Have your broker get an AIP directly with an underwriter, they agreeing acceptance in full knowledge of the DN and its circumstances. (he may need to involve the lender rep to get this sorted, if the lender does not allow direct access to the UWs by brokers/applicants.

Don't panic, see what next week brings.... and I wish you well

Hope this helps

Holly

ugh1979

OK, thanks very much for your advice.

kingstreet

holly_hobby wrote: »

I suspect that you did not reveal the default at application stage

There's nowhere to disclose it, H.

I looked last week and nowhere on a Mortgage Promise form or on a mortgage application does it ask about adverse.

holly_hobby

Hi Kings ..

The OP knew they had a DN and really should have revealled it just to cross all Ts. But of course I'm talking from a prof point of view, WE know that they should all be disclosed, but a layman wouldn't necessarily be aware of it if the q isn't asked. (how strange though not to ask if there is any adverse !!)

Would you suggest if they used this as the reason for non-disclosure, when clearly (from the applicants point of argument) you can't disclose what hasn't been asked. Halifax would accept a 2yr old DN ? Is it worth the OP having a chat to see if in anyway it may be turned found due to non deliberate concealment ? (of course if this was the only reason for decline - which we don't know at this stage)

H

kingstreet

I was amazed on both looking at the printed forms and going through the online promise and full application system on another case there is literally nowhere to declare adverse credit information, or even a free-format space to give any further information.

If I was the OP's adviser, I'd have started off with copies of his credit files from all three CRAs to establish exactly what was there before I went anywhere near a lender. The OP should do that now, IMHO.

I would guess the decline is due to the default and had it been disclosable at AIP it would have weeded out the application, as it would with another lender. It's possible when he sees the other credit files the debt collection agency has registered the same default again, but this time in its name, not First Direct's, so it looks like there are two.

The overall quality of the case is also an issue. The OP doesn't make clear if he's got a decent deposit, nor does it mention if he's applying on shared equity or something similar which also reduces the pass level from the AIP.

More information needed on the overall situation before meaningful advice is possible. Point one is definitely to get the credit files before taking any further action.