Nationwide refused mortgage last min with strange excuse - help!

sweetpeagreen

This is the first time I'm using a forum so I hope I'm doing this right. I'll try and keep it short too. Please help if you can I'd appreciate any feedback you can give.

Myself, my fianc! and his father approached London and Country brokers, who advised an application to Nationwide after the broker talking through our personal circumstances at length with Nationwide and them agreeing to lend what we required (in fact they said they would lend more). They agreed to a 90% mortgage, and due to my father-in-law's age it would be for 21 years. The flat we are buying is 230k, so the mortgage is for 207k.

To clarify they are taking in to account the two highest earners, so my fianc! and his dad. Between them they earn approx 70k per year, and his dad at retirement age based on his pension savings now would have an income of 27k per year. We all have excellent credit records, and his dad owns a property which my fianc!'s mum lives in that's worth about 230k but the mortgage was paid off many years a go. None of us have any debts apart from his dad paying for a car per month, which is quite negligible.

To cut a long story very short...last week tues we received an email from our estate agent updating us that the lender had carried out a survey that day. This was news to us as we hadn't even heard from them regarding a decision in principle yet. Still, the broker called the lender who confirmed this was the case and it was good news. The last thing they said they needed to see was proof of our deposit. This tues the broker then got a call from the lender to say we will have our mortgage offered within the next 24-48 hours. So, 48hrs later (yesterday) the lender then says they will now only be happy to lend 85% (not the agreed 90%) because it will be my father-in-laws second property! I fail to understand how this impacts because he doesn not pay a mortgage on this property anymore. I have a friend who works for Nationwide who enquired, and apparently it's just a 'rule' that they will only lend 85% to those who already own a home. However, they knew this from the beginning. The broker is contesting it and he has provided Nationwide with the telephone conversation recording and transcript in which he clearly explains our situation and requirements, and where they agree to a 90% mortgage. He said they should with that evidence stick by what they initially agreed, but they have never encountered this with Nationwide before so it's hard to guess the outcome.

We have the solicitor and estate agent on out backs for updates, and it's getting unbearable. Has this happened to anyone else before? And what do you think the likelihood is they will give us the 90% as initially agreed? I'm absolutely distraught by this. All I want to do is have a modest roof over our heads so we can get on with our lives/start a family etc. (We are both living with family at the moment after moving back in a year a go to save again after coming out of the shared ownership scheme).

Thank you so much for your help and support

kingstreet

The Nationwide criteria is clear on this point. It's mentioned in two sections and I'd suggest the broker is at fault for suggesting Nationwide in the first place;-

Clients with Additional Properties

Where your client will own more than one property on completion of their new loan with Nationwide the maximum LTV is 85%. Purchase applications for these clients should be keyed as a Second Property to ensure the correct LTV limit is applied.

http://www.nationwide-intermediary.co.uk/lendingcriteria/general/income#additional

and

http://www.nationwide-intermediary.co.uk/lendingcriteria/ltvs

in the table.

If the broker keyed the application, he would have been made aware of this if he keyed it as a second property case.

sweetpeagreen

Thank you for your reply.

The application was done on paper as the online system can't do applications for more than 2 people. So we filled in the application and this was then sent to the broker.

We were wondering where the blame lies, and this could well explain it. Although, I presume that the the person who the broker spoke to at nationwide is also to blame, as the broker claims our situation was explained in detail to them and they agreed, and he has evidence of this (transcript of phone call). Between them an agreement was made that perhaps in hindsight wouldn't have ordinarily been agreed, yet I'm keen that we don't end up suffering because of it.

I called the broker over an hour a go, and I'm still awaiting a call back. Any ideas on how I should progress from here to get people to admit their mistakes and to amend the error in our favour?

Thank you

sweetpeagreen

Just a thought..does anyone have the name and email address of the London and Country Managing Director? I have a feeling I may need to escalate this in order to get a resolution in a reasonable time frame, as I've got no time for mortgage advisors sitting on it until they figure out a way to deal with it that won't admit they are to blame. I have found the name Pat Bunton on LinkedIn, but can't find contact details. Thank you so much.

kingstreet

I forgot it's a three party application, so yes, it does have to be submitted on paper rather than online.

I guess the Nationwide's response is going to depend on who the L&C bod spoke to and what was said. If he only spoke to a new business clerk, he may be out of luck. If it was an underwriter, he may have a chance.

All you can do now is sit and wait to see what transpires.

kingstreet

sweetpeagreen wrote: »

Just a thought..does anyone have the name and email address of the London and Country Managing Director? I have a feeling I may need to escalate this in order to get a resolution in a reasonable time frame, as I've got no time for mortgage advisors sitting on it until they figure out a way to deal with it that won't admit they are to blame. I have found the name Pat Bunton on LinkedIn, but can't find contact details. Thank you so much.

No idea. But you should always contact the Compliance Officer in the first instance. A formal complaint sets a clock ticking which allows them upto 8 weeks to investigate. It's better to set that clock ticking now, rather than later.

sweetpeagreen

Thank you so much for taking the time to respond.

I think I remember the broker saying he spoke to an underwriter (I hope I'm just not willing myself to imagine this as true)!

sweetpeagreen

Should that be a complaint with the broker, with the lender, or both? Thank you

cte1111

I would have thought that it was unlikely that you will be able to force them to lend you the money. Just because you had an agreement in principle, doesn't mean that they have to follow through on it, any more than if you had decided you didn't want to buy the house any more, they could force you to take the mortgage out anyhow.

If I were you, I would go to another broker and start searching for another mortgage ASAP, or work out where you can borrow the extra 5% from.

Dave_Ham

I can only see this as a complaint to the broker, they can argue out with the lender although I do not think they will have any joy.

Nationwide are incredibly unlikely to budge on this and most lenders are now at 85% LTV max for being on a second mortgage.

Sorry its not better news, you need to think of a plan B I think and you should not lose out financially..

Best of luck...

kingstreet

sweetpeagreen wrote: »

Should that be a complaint with the broker, with the lender, or both? Thank you

Compliance Officer at L&C.