Unfair brokering, is it possible?

darasipas

We are FTB and recently applied for mortgage in one BS through our broker. This week he called us and said that our mortgage application was turned down because the property we are buying is ex-council one. Now he wants us to go through another lender which of course has higher rate. Yesterday I called the BS just to enquire about the decission and the money we paid for an application (whether there was any chance for refund). In my surprise, the advisor on the phone assured that they don't know anything the decission (we have not received any formal letter either) and the only thing they need from us is direct debit form (which appearantly was lost in post, because we send it a week ago) to issue a formal offer. Today we have received the form and will send it back. Now we don't understand which side to believe. Next week we have a meeting with our broker to discuss new lender and sign the application papers. Of course we will hold until we find out which side is right.

herbiesjp

Sounds like a strange situation. Who is the BS you are going through and I'll see if they do ex-local authority properties. Is it a house or flat? Where is the property? If a flat, homany floors, including ground floor are there?

Normally a broker would not place a mortgage with a lender that was not going to proceed with it based on this criteria!

Compensationitis

PLEASE get back to the BS and deal direct if all they need is a DDM.

darasipas

Property situated in South East it is standard first floor one bedroom maisonette (120 year lease) and the lender is Coventry BS. It is pretty ankward situation because we don't know whom to trust. When I talked to the advisor on the phone he was pretty sure that we only need to send DDM and they will lend the money. Of course, there is a chance that customer services could be not informed about our decision but on the other way why BS haven't sent us formal letter about decision.

Compensationitis

Go see the BS

herbiesjp

From Coventry site:

"We are unable to offer mortgages for freehold flats or maisonettes, or ex-local authority or ex-housing association flats in blocks that have more than five storeys in total. If the flat/maisonette is an ex-local authority/housing association property, we will only lend where there is no more than five storeys in the block and up to a maximum of 70% LTV. "

What is the purchase price, and what amount of mortgage have you asked for?

mando_2

We have had a mortgage from Coventry BS on an ex-council house before. However, it was a town house, which may be slightly different. We have always had a mortgage through Coventry and the Customer Service people have always known what they are talking about.

On your paperwork it should say how much the financial advisor will recieve for getting you to take that mortgage with Coventry BS, it would be interesting to compare this to what he would recieve from the new lender?!?

dunstonh

If the person valuing it didnt note that it was ex council (not all valuers are local) then they would lend it.

It does seem strange that the lender have a different reason to the broker. However, dealing with financial services companies is never much fun. Often you can ring up 3 times and get 3 different reasons.

The broker should have known what was and was not acceptable before placing the application. However, I suggest you ask to see written proof that your application has been declined. Do not doubt or believe either side until one gives proof.

darasipas

I will call tomorrow to find out whether they received Direct Debit form and ask what is going to happen next.

darasipas

It is appeared that the broker was right in the way that Coventry won't lend us amount requested (only 70% LTV). But anyway he should've known before he applied (we lost £199 fee).

herbiesjp

He should have done it took me 2 minutes to find and post the information!

Who is he suggesting this time around? Are you still going to use him?