Getting a mortgage with a default

gazfocus

Just had an email from our IFA saying that she doesn't think I'd be able to get a mortgage because I have a 5.5yr old unsettled default on my credit file. The default is for just over £600 and despite contacting the debtor several times they are unable to locate the account and until they locate the account I can't pay it off!

My IFA sent my credit report to Leeds BS but heard back today saying they wouldn't give me a mortgage with an unsettled default on file and even if I settled it, it would need to be settled for 4 years.

She said that the problem is, there are not many lenders that will offer a mortgage on a shared ownership so the fact I have a default is making it even more difficult.

Is there anything I can do to try and get a mortgage or should I just wait 7 months for the default to fall off my file and hope a better property is available then?

Dave_Ham

Have you had unsecured credit since this mortgage?

ACG

Even after it falls off so to speak it still has some effect on your credit file.

You might struggle, i wouldnt say Leeds is the only lender to try but im not sure the others would have a different outcome.

gazfocus

Dave_Ham wrote: »

Have you had unsecured credit since this mortgage?

I haven't had a mortgage and am a FTB. The default was for an Orange phone contract that my ex ran up.

Since the default, I have managed to get an overdraft on my bank account (a graduate account), 2 unsecured credit cards and a mobile phone contract with three.

gazfocus

ACG wrote: »

Even after it falls off so to speak it still has some effect on your credit file.

You might struggle, i wouldnt say Leeds is the only lender to try but im not sure the others would have a different outcome.

Why if it's not there?

Dave_Ham

What credit card companies?

There are possibly 2 more flexible shared ownership lenders but I am not sure they will even like the unsatisfied default for that amount either..

Sorry..

Thrugelmir

gazfocus wrote: »

The default is for just over £600 and despite contacting the debtor several times they are unable to locate the account and until they locate the account I can't pay it off!

Most likely they've sold the debt on some years ago.

gazfocus

Dave_Ham wrote: »

What credit card companies?

There are possibly 2 more flexible shared ownership lenders but I am not sure they will even like the unsatisfied default for that amount either..

Sorry..

Vanquis and Capital One.

Thrugelmir wrote: »

Most likely they've sold the debt on some years ago.

It's still on my Credit File as Orange. I'm wondering where to try asking them to remove the default if they can't trace the account.

Thrugelmir

gazfocus wrote: »

It's still on my Credit File as Orange. I'm wondering where to try asking them to remove the default if they can't trace the account.

They won't remove the default just because they've been unable to trace you or sold the debt on.

The account was defaulted "on" which is factually correct. Therefore remains on your account as a warning to others. Which is ultimately the basic purpose of credit reports.

They may have just assigned the debt to a recovery agent. So that any monies eventually recovered are shared. Though will remove you from their accounting records as being a bad debt (total loss).

gazfocus

Well how do they know if I owe them any money if they have no record of me? Doesn't make sense. I've gone as high up as the CEO's office and even they cannot find the accounts on the system. All I want is for them to direct me to who the account is with so I can get this sorted.

Thrugelmir

gazfocus wrote: »

Well how do they know if I owe them any money if they have no record of me?

For the simple reason they don't keep you on the system. Your debt has been written off in their accounting records.

Just because you need their assistance now doesn't mean they have to be co-operative after you've been AWOL for 5 and half years. You avoided them and their recovery agents.