Newbie! 2007 c/c default & mortgages

jjjenny

Hi all,

I'm new to all this so please accept my apologies.... I hope I'm on the correct board.

I had a HSBC c/c in 2007, worked abroad, thought a D/D had been set up to cover payments... it hadn't. Arrive back in the UK late 2007... realise no payments had gone out and HSBC had passed on the details to their internal debt collectors.

I paid it off straight away (£516) and didn't think anything of it to be honest. I applied for a mortgage with HSBC and it has been rejected due to unauthorised credit card usage. I checked my credit rating and saw a lovely great big huge default in my name. Being young and stuipid I didn't think paying off this debt would affect me...

So now what do I do? I bank with HSBC (advance account) have £40k a year going into my account and a 15% deposit. HSBC gave me an "offer in principle" for me to make an offer on a house...which has been accepted but now I think I'm screwed and will loose the house and have to wait until 2013 (which feels like the end of time right now) for this default to leave my credit record.

Technically the default is completely correct; I did default and I did pay it off as soon as I knew about it ... the Mortgage broker in branch is trying to do all she can to get it through but she recommended starting an application else where, don't think I want to do that due to multiple attempts to access credit rating etc...

Do I ....

a) cry lots and eat choc and pull out of house sale now

b) attempt to argue my point with HSBC but will most likely get stone walled but might not?

c) apply for mortgage else where and hope that someone will accept me?

d) accept my life is pants and that I'm an idiot an I'm destined to live in rental for the rest of my life and that I have ruined my husbands life too?

All advice is welcomed.

JJJ xxx

Senior_Paper_Monitor

There are dozens of other lenders !

There should be plenty of lenders able/willing to accept the circumstances you describe. HSBC are very picky.

Take the details to a broker - they will check criteria with the individual lenders and normally we would 'pre-approve' the case with a BDM/underwriter where we could pre-present the issue and supporting story ahead of any credit scoring

jjjenny

Thanks, I didn't know if I should just give up and accept defeat (that's how I feel today anyways...)

JJJ xxx

Senior_Paper_Monitor

Your case sounds pretty easy - I think any half competent broker will place it faiorly easily (assuming the rest of the case stands up as you indicate).

I should stress - don't take your 'option C' - random applications are dangerous to your credit rating (and sanity) - the skill of the broker is to place the application where it has the highest likelihood of acceptance, with a full declaration of relevant fact, not just the lowest headline rate.

jjjenny

Thanks, we'll ring on Monday and see what we can arrange with a Broker. We really want to secure this property and I don't want to let my husband down by failing to get a mortgage and stuck renting for ever.

DVardysShadow

jjjenny wrote: »

Do I ....


d) accept my life is pants and that I'm an idiot an I'm destined to live in rental for the rest of my life and that I have ruined my husbands life too?

The default has little more than 2 years to run, before it comes off your record.

I would suggest that you speak to the banking people in HSBC - not the mortgage people and make it plain that if HSBC will not play ball and look at the default in context, you will have to move your account elsewhere.

And if needs be, move it sooner rather than later. This gives you a 2 year wait before the default comes off the records accessible to other lenders, during which time you can establish yourself as a good customer.

The sorry fact is that with 2 years from coming off the street you will be a better prospect to another bank than you will be with HSBC 4 years clean after a default which does not truly indicate any financial delinquent tendencies.

HSBC will have your default on record for ever - they are not bound by the 6 year rule for their own records. If they won't play ball after 4 years, it is not worth hanging around much longer to see if they change. Hopefully this will be sorted in your favour once a real person sees it. But if it is not, then time to get known elsewhere.

jjjenny

I have zero loyalty to HSBC, I don't mind moving bank accounts at all. I think it's certainly worth using as a final throw of the dice.

jjjenny

Hi all,

Just thought I would close this tale of woe off by letting you know there was a happy story after all. HSBC has offered myself and my husband a 90% mortgage at 4.99% and we are over the moon. For all those with far from perfect credit ratings, if you have a decent mortgage person in branch or over the phone it just proves that there are still people willing to lend if a human looks at your situation rather than "computer says no".

Good luck!!

Jjjenny

xxx

kingstreet

I applied for a mortgage with HSBC and it has been rejected due to unauthorised credit card usage.

HSBC gave me an "offer in principle" for me to make an offer on a house

Jenny - can you tell us more about this? I know you're sorted, but for anyone else applying to HSBC it could be a big help.

When did they give you the AIP? How long between AIP and full application? Did they explain how they could accept you with the same credit data on file one day and reject you the next?

jjjenny

Hi Kingstreet,

I can indeed go into further detail, please forgive me if this is overkill...

I have banked with HSBC with my current account since 2003, I have been utilising the 8% savings account they offer with the "Advance" account as has my husband and it is clearly labelled "HOUSE DEPOSIT" on the account name... (sneaky I know but I thought it might make a difference when I opened the savings account..)

I went into branch and started chatting to the lady, she said i had a good internal score (62 if that means anything to anyone?? I thought it sounded pretty pants but there we go) and on the basis of mine and my husbands combined earnings she would give us a "offer in principle" there are then so, if we decided to make an offer on our second viewing we could hand it over to the estate agent there and then as the house is a bloody steal!! She typed on out for me whilst I was just sat there and I nearly fell off my chair (13th Sept)

At this point I should note that in the grand scheme of things we are borrowing not a lot... £112500 with a 10% deposit (£11250 deposit) and have a combined income of £40k

"Computer says no" and rejects application, She decided to send application off to the underwriters anyway as she thought it was ridiculous that we had been rejected. What I found out in the meantime was that British Gas (Don’t get me started on that) had put a default on my credit record five years ago for £39 which had scuppered our chances of getting a mortgage. I rang British Gas and shouted lots (long story and not my bill : muchio grande story over beer, this is the highlighted version) and it was promptly removed after I rang them constantly every day for 4 days until someone got it removed… (I was such a pain to the complaints team).

HSBC re-ran credit check and it came up OK this time – it passed so the C/C wasn’t the problem previously, it was the fact there were TWO defaults...
She sent the application off the underwriters this Friday just gone (29th Sept)… found out 11am today (4th Oct) that it went through after a human looked at the application J
All credit though to the lady in the branch though for fighting our corner, shame on credit expert for not showing information though because the address said “apartment” instead of “flat” so be aware of different variations of addresses.
We are signing paperwork etc next Thursday and fingers crossed it will all go through OK, my friends and family are more excited than me as I’m trying to stay calm until I get the keys as I won’t believe it until I see then!
Mortgage rant over, I bet you wish you’d never asked now J

JJJenny
xxx

kingstreet

That could be useful for future enquiries. Thanks.