Mortgage declined - Defaulted in error - HELP!

KerensaDelphi

2 years ago I disputed some bank charges with Nationwide. After them messing about for 8 weeks they decided to refund me in full and compensated me with £100. I thought that was the end of it. Last month I found my dream home (1st time buyer) and made an offer which was accepted. I applied for mortgage with Natwest who told me that I had a problem with my credit history, signed up to Equifax and saw nationwide had defaulted me. Got back in touch with Nationwide who have told me this is a mistake. They wrote to Natwest explaining - Natwest are not satisfied and have said no. Nationwide have written to get default removed but this can take 28 days. So I have now lost out on stamp duty saving and will have to pay another months rent (approx £2200 incl stamp duty). Can someone tell me where I stand and whether or not I have a case with Nationwide to claim back this money? thanks

property.advert

I do not know whether there is a prime facie legal argument in this instance but any Nationwide defence that it will rectify the problem does not excuse the fact that they were wrong to do what they did, they have admitted it and as such, they must surely be liable for their actions. However, in mitigation, you would have to consider whether, in 2012, it is reasonable to expect buyers to monitor their own credit references.

My argument would be that it is not reasonable, though it is highly prudent. By one's own actions, repaying everything, not missing a payment etc. you fully expect your record to be clean. There is also a cost involved. You should not expect to have to check up on information over which you have no control and given the almost 100% importance lenders put on this information, believing it over any argument you make, you have an absolute right to expect a significant duty of care when they compile their data.

As to compensation, I believe it would be fair but you are in the realms of consequential losses. Nevertheless I would not want to be Nationwide defending this case in the small claims court if the claimant could generate significant publicity, whether I thought I would win or not.

Personally I would approach Nationwide for your mortgage. They have screwed up and they won't need 28 days because they know the problem is false. This may mean you do not lose out so much and I believe Nationwide would rather settle with you quietly than have this blown up all over the press.

KerensaDelphi

Thank you so much for your message. I feel more confident now ;-) BRILLIANT!

dunstonh

Thank you so much for your message. I feel more confident now ;-) BRILLIANT!

Sorry. I am going to pull you the other way now.....

Lenders know that there can be errors sometimes and I am surprised Natwest still refused knowing that it was an error (a letter from Nationwide should be sufficient).

The fact that Natwest, despite knowing this, are still declining the mortgage would "suggest" that this is not the reason for refusal. It is possible that the bad running of your account 2 years ago has put them off. Yes Nationwide may have refunded some but you still incurred them through your own actions. How you run your current account is a consideration by lenders.

Nationwide have admitted the error but they would only be culpable for costs in court action if Natwest confirmed to the court that they refused for the incorrect default and nothing else. However, as said above, if that was the case then why are they not lending them money knowing that is the case.

What does your mortgage broker say? They normally get access to underwriters and can discuss issues like this and often correct a snag.

KerensaDelphi

I decided to do the mortgage myself and cut out the middle man and his fees.

You are correct in what you are saying but I have no choice except to follow this through, as the first response said, the bank won't want negative reporting.

dunstonh

I decided to do the mortgage myself and cut out the middle man and his fees.

Except you didnt. You let Natwest keep the commission (if they advanced it) instead of it going to someone that could have helped you. You replaced a middle man with another middle man. Have you spoken to an underwriter yet as you are doing it yourself?

I have no choice except to follow this through, as the first response said, the bank won't want negative reporting.

I suggest you get it in writing from Natwest that the default is the reason for complaint. If they wont do that then it indicates that it is not the reason.

Nationwide may have done something wrong but its hardly media reporting material. In fact Natwest look worse in this than Nationwide. That is unless there is another reason and they are just blaming Nationwide as it is more convenient for them.

KerensaDelphi

I should've come here in the first instance for help. Being a first time buyer it's quite clear I don't have a clue! And I just had a baby which has definitively affected my brain ;-)))

Looks like I am going to have to start again .... And get it right this time!

ACG

Go and see a broker, they can find someone that might still offer you a mortgage despite your history.

When did you apply for the mortgage? If it was only this week it may not have gone through before the stamp duty rise anyway.

You could ask the nationwide maybe?

To be honst, the fact you didnt know about those charges/defaults means that a broker would probably be in a similar position as you anyway as they would have applied without knowing the full story. The difference is, they may have got a definitive answer for the decline.

KerensaDelphi

When did you apply for the mortgage? If it was only this week it may not have gone through before the stamp duty rise anyway.

This has been going on now for 10 days - I would have made the stamp duty cut off.

You could ask the nationwide maybe?

Nationwide have been helpful in trying to remove the default and liaising with NatWest almost daily. I have emailed Nwide advising that Nwest have declined. I have told them this is going to cost me and just waiting for their response before i take this any further.

ACG

I mean, could you not ask nationwide for a mortgage?

MagicCats

Taking the mortgage out of the equation you have a default registered that the bank has admitted was done in error. Get all the paperwork together that states this and start a claim. I have heard of people receiving up to five figure sums for these sort of errors.

Edit - more likely a four figure some, too much coffee lol!