Unfair Mortgage Decline

Lucyjb86

This is a long explanation which I would really appreciate advice on so please bare with me....

I took a sole mortgage out in my name on 27th October 2010 with Halifax PLC. It was a 2 year tracker and the term was due to end in October 2012. Within this product was the ability to 'port' the product to another property so that I could transfer the mortgage if I wanted to move home.

On 18th March 2012 I contacted Halifax and asked them if I could increase my mortgage and include my partner. They completed the initial checks and the affordability calculator and that all was OK. They then completed a credit search on us both and it 'failed.' After several phonecalls I found out it was Neil's credit rating that had failed. We were completely baffled by this and could not understand why. We were advised to look at our credit rating online so we signed up to Experian. My rating was 971 and there was no problem, however Neil's was a low credit rating which we were told by Experian was because he had never had any credit before, however, he did get his car on Mini Finance and had not missed one payment. This was very upsetting considering we thought there would be no problem and had already had an offer accepted on a house and accepted an offer on the sale of my house. I asked Halifax to 'refer' their decision so we could get to the bottom of what the problem was - all the time not wanting to leave Halifax because of an approx £2000 redemption penalty. I had also never missed a payment on my sole mortgage.

Again the decision came back ‘failed’ and they would not tell me any other reason. I again asked the lady I spoke to, if there was anything else I could do. She tried again and sent our application to the underwriters who again declined our application. Even they were baffled!!! We were asking for approximately £97,500 on top of the £104,000 I already had on my mortgage with a 25% deposit. We thought that was fair and it was clear from our deposit and our affordability we could afford the repayments. The lady back to me and the decision was that they were willing to give me “like for like borrowing” which meant they would keep the borrowing the same as my sole mortgage, so effectively would lend Neil nothing, even though he is paid £30,000 per annum.

I decided to go elsewhere and get a second opinion so went to Lloyds TSB Bank PLC in May. During this time I had to halt the sale and purchase of both houses and to investigate further as to why we were not getting a mortgage. We went to Lloyds TSB Bank and within an hour we were accepted for more than we wanted. We were offered up to £204,000 but due to a down valuation of the house we were purchasing we ended up borrowing less. I was told that there are different accepting criteria at Lloyds TSB; A, B and C with A being the best and ‘straight accept.’ We were A.

I understand there maybe different lending platforms between Halifax and Lloyds TSB Bank but they are both part of the Lloyds Banking Group. Therefore, I find it difficult to believe they are miles apart, going from an instant decline to a straight ‘A’ accept.

I do not believe I should have to pay the redemption penalty because of the reasons stated above. It is also a difficult time for everyone in the current climate and I cannot believe Halifax have given this poor service. I would have happily stayed with them had they offered us the mortgage but now I will never go to them for any banking services again.

I passed my complaint onto the financial ombudsman who basically said that Halifax did not have to pay me the penalty back as "it's up to Halifax who they want to lend to and they don't have to tell you why they won't lend to you". I'm baffled and upset at the lack of help especially in this climate.

Any advice on whether I should take it further (small claims court) or just sit back and lump it. I appreciate your feedback. Thanks! X

DevCoder

Sorry but it is very much a case of sit back and lump it, the FOS is right in this case much as it seems unfair.

I hope you are happy in your new property, bet advice I could give is put it behind you and enjoy life with your partner and new house, life is too short to be miserable

dunstonh

Within this product was the ability to 'port' the product to another property so that I could transfer the mortgage if I wanted to move home.

Porting is not a contractual event. It is always subject to current lending criteria.

My rating was 971 and there was no problem,

the score rating is just a marketing thing for Experian. Means nothing to lenders.

I understand there maybe different lending platforms between Halifax and Lloyds TSB Bank but they are both part of the Lloyds Banking Group.

Its not as simple as that. Halifax is considered to have a higher risk book that Lloyds. They now probably have a tighter criteria as they aim to derisk the book. I remember when Lloyds, TSB and C&G used to have different lending criteria. So, it is quite common to find different distribution channels in the same group having different criteria.

I cannot believe Halifax have given this poor service.

It is not poor service. It is a lending decision.

I passed my complaint onto the financial ombudsman who basically said that Halifax did not have to pay me the penalty back as "it's up to Halifax who they want to lend to and they don't have to tell you why they won't lend to you". I'm baffled and upset at the lack of help especially in this climate.

As there is no wrong doing, the FOS have very little input on what they can do. It is a commercial decision and the FOS cannot rule on commercial decisions. So, they just make sure nothing wrong was done and it appears not.

Any advice on whether I should take it further (small claims court) or just sit back and lump it.

You wont win and will incur charges. Its time to move on. Frustrating yes but you need to put this one to bed.

roonaldo

Lucyjb86 wrote: »

I do not believe I should have to pay the redemption penalty

you dont have to, just dont pay off the mortgage.

I passed my complaint onto the financial ombudsman who basically said that Halifax did not have to pay me the penalty back as "it's up to Halifax who they want to lend to

correct

Any advice on whether I should take it further (small claims court) or just sit back and lump it.

take them to a small claims court, do you want to through good money after bad. you had a mortgage declined, welcome to the real world.

You seem to think you have some divine right for them to lend you money. mortgage lending has changed, it 2012 now not 2002 when it was on tap.