Nationwide refused mortgage due to Landlords ref

nodebtdream

Hello all, we are trying to buy our council property and today we have recieved some bad news.

Our mortgage broker phoned us today and told us that our application with Nationwide was declined because our Landlords reference stated that we have been in arrears with our rent payments for the last 3 years :mad:

However we have never ever missed a rent payment and we always round it up and pay slighty more than what is due.

The only reason i can see why is that we pay our rent for the previous 4 weeks and not for the forthcoming 4 weeks. This is what we have always done and the council have been absolutely fine with it.

We are really frustrated with this now as we have paid
£99 booking fee
£210 valuation
£72 Landlords reference
all of that is lost and we'll probably have to pay it all again for another lender.

Do you think there could be any way of getting Nationwide to reconsider ? Or is it a lost cause ?

Thanks for your time

harvey115

That's a bad news!

I don't understand why has the Landlord come into the picture in this case. I am sure you have a direct agreement with the Council rather then the landlord. So as long as the Council is happy with your payments it should not be your headache to deal with the landlord at all.

I think you should have provided reference from the Council rather then the landlord because you have direct agreement with your Council.

Since I am no broker and certainly do not have any experience in this area, but the common sense would point me to the above conclusion though...

nodebtdream

Apologies for the confusion the Council is our 'Landlord' in the eyes of the mortgage provider

harvey115 wrote: »

That's a bad news!

I don't understand why has the Landlord come into the picture in this case. I am sure you have a direct agreement with the Council rather then the landlord. So as long as the Council is happy with your payments it should not be your headache to deal with the landlord at all.

I think you should have provided reference from the Council rather then the landlord because you have direct agreement with your Council.

Since I am no broker and certainly do not have any experience in this area, but the common sense would point me to the above conclusion though...

harvey115

I think you should speak to your case worker and explain the situation they might be able to give further details to the Lender and clear any confusions.

It seems like some staff member who does not know you at all was tasked to send a reference letter to the lender. You case worker should have more knowledge on your agreement and the payment schedule the council has put in for you. I believe you pay using the pay in booklet that you have from the Council on your account?

I am not sure whether the lender will change their decision but clearing this with the Council is necessary in case any future lender asks for a reference from your Council again.

mic200202

If its any crumbs of comfort,if you have been accepted by Nationwide then you should have a good chance somewhere else.

harvey115

One other thing I do not understand is why the Lender has asked for Landlord reference in the first place. Is this a requirement when buying your Council House?

If this was just a one off, then possibly doing an application with some other lender who do not ask for Landlord reference in such cases should be the one to go for.

WestonDave

When you say the council have been fine about you paying in arrears, do you mean that you've spoken to them and they have agreed this, or do you mean that they haven't bothered to chase you?

Technically the reference is correct - rent (on any property - residential or commercial) is payable in advance, so you have been 4 weeks late with every payment - you are in arrears. You may have made this worse by "rounding up payments" - if your rent is say £99.50 per month, you are paying a month late and you pay £100, that may well be interpreted as £99.50 + 50p to reduce the arrears!

As above you really need to clarify with the council whether you paying late is something they are tolerating because its not worth enforcement, or whether its an agreed departure from normal rental practice!

betmunch

When I worked at the council years ago, I got a letter from a mortgage lender regarding one of the tenants for the areas I covered.

They were very specific with what they wanted to know and it would have been very balck an white to what they could put on it.

I suspect WestonDave is right in that the council have tollerated a small amount of arrears as you pay them up regularly and its not worth enforcement.

I think its worth speaking with your Estate Officer, or whatever they call them in your area, and ask what was put on your reference. However, they will need to explain why their original reference was incorrect (assuming it was) before Nationwide will consider changing their stance.

In answer to Harvey they are simply checking that the rent is paid on time everytime. As rent doesnt come up on credit files they need to ask the landlord.

nodebtdream

Hi thanks for your replies.

I'm not sure why they required a reference, we've never been through this before so we just assumed it was standard practice.

@WestonDave
We have spoken to the council about our payments many years ago and have a rent agreement in place, they agreed that our payment schedule was fine. It is mainly down to the fact that they charge the rent weekly but we get paid monthly so this is just how it worked itself out.

To be honest the whole process of obtaining the reference from the council was a massive set back to start with, it has taken just over 6 weeks for them to send back the reference.

I've just been to the council office for a rent statement which they could give me, if i were named on the tennancy that is:mad: so i guess the wife will have to pick it up tomorrow because she's at work.

It wasn't until we put in for the right to buy that we found out i wasn't on the tennancy and that they had no record of me living here, they made me provide proof that i had lived there for at least the last 12 month, i wouldn't mind but we got the tennancy together and moved into the house over 8 years ago.

Simon_gloster

Nationwide require a strict 'last 12' statement from the council in every RTB.

Any form of discrepency is not tolerated from them and its an instant decline.

I'm not being nasty.......I just know!!!

As mentioned, I rhink Nwide are one of the hardest lenders to be with, therefore you will have many options. Lots of lenders do RTB.

Weigh it up, you have lost money....this should make you more determined.

sockpuppet

It may be worth getting this looked at again - as far as I can remember when I used to have to check council rent references, they are always 2 weeks ahead and 2 weeks in arrears - that is just how they are. We used to be aware of that and would check it accordingly.
So officially you are not actually in arrears. The UW at nationwide should really be aware of that BUT I know that at the moment they have lots of 'temp' staff in doing the processing (I know because they told me) and a lot of paperwork is having to be double checked by a more experienced UW/Procesor - maybe that hasnt ben done in this case??

Or could you check with your council if this is also the case with them? and if so could they confirm this in a letter that you could forward to the lender.